By Alex Trelinski • 25 May 2020 • 15:51
GERMANY’S Lufthansa air carrier has reportedly reached a bail out deal with the country’s government in Berlin.
Lufthansa, along with all other airlines, has been ravaged by virtually all air travel having been stopped during the coronavirus pandemic.
The deal will apparently see the carrier get a €9 billion investment which in effect will see the German government get a 20 per cent stake in the company.
In April, the carrier claimed that it was losing €1 million per hour.
The news will be looked on with interest by operators in other countries like the UK, where state intervention to save the crippled air travel industry has not been as forthcoming.
Big names like British Airways and Virgin Atlantic have announced job losses, along with budget carriers like Ryanair.
The Lufthansa board will still have to rubber-stamp the deal, as will the European Union, who have agreed to take a far more liberal view on state intervention in the wake of the Covid-19 crisis.
Reports say that the German government money will come with ‘strings attached’ including an end to dividend payouts to shareholders and management helping themselves to extra money, including bonuses.
Last weekend, Lufthansa said that it would look to operate around 160 of its fleet, as countries like Germany and Spain look to ease their air travel restrictions.
Nevertheless, that is still a small proportion of the 700 plus aircraft that the company owns.
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