Lufthansa and German government agree on ‘€9 billion rescue deal’

Coronavirus-stricken German airline group Lufthansa has agreed in principle a nine-billion-euro rescue deal with Berlin that would see the government climb aboard as a shareholder, DPA reported on Monday.

Lufthansa and German government agree on '€9 billion rescue deal'
Numberous Lufthansa planes parked in Frankfurt's airport. Photo: DPA

With mangers and ministers in agreement, Lufthansa's supervisory board and the government's economic stabilisation fund (WSF) must now rubber-stamp the
proposal, before shareholders and competition regulator the European Commission are asked for their green lights.

The airline, whose subsidiaries include Austrian and Brussels Airlines, Eurowings and Swiss, confirmed last week details of the rescue under  discussion.

The German government would take a 20-percent stake in Lufthansa, as well as a convertible bond worth five percent plus one share — allowing it to claim a blocking  minority shareholding to shut out hostile takeover attempts.

The package would also include a three-billion-euro state loan to the airline as well as two government-appointed seats on the supervisory board.

Conditions are also likely to include “the waiver of future dividend payments and restrictions on management remuneration”, Lufthansa said Thursday.

While 90 percent of Lufthansa's fleet has been grounded because of the pandemic, costing the company around one million euros per hour, politicians in Chancellor Angela Merkel's coalition government spent weeks wrangling over the details of a possible rescue.

Conservatives wanted to minimise state involvement and control, while centre-left leaders hoped to fend off job cuts and hold the airline to  environmental objectives.

Chief executive Carsten Spohr has warned that the company likely now has 100 planes too many, putting 10,000 jobs in danger.

READ ALSO: German airline giant Lufthansa puts 87,000 jobs on reduced hours

Lufthansa at the weekend confirmed reports that it plans to double its active fleet to in the coming weeks and add popular German holiday destinations back onto its much-reduced flight plan.

But the majority of its roughly 760 planes will remain grounded as coronavirus restrictions are lifted only gradually.

Still places loved by German holidaymakers such as the Spanish island of Mallorca, Greece's Crete and the German North Sea retreat of Sylt will return to the schedule, with 160 Lufthansa aircrafts – including those of subsidiaries Swiss and Eurowings – set to take off on a more regular basis in June.

READ ALSO: Germany's Lufthansa to ramp up European flights in June

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Pandemic in Germany unlikely to end this year, says top virologist

High profile German virologist Christian Drosten believes Germany will see a severe spike in Covid infections after summer, and that the pandemic will not become endemic this year.

Pandemic in Germany unlikely to end this year, says top virologist

Drosten previously said that Germany would probably be able to declare the end of the pandemic this year.

But in an interview with Spiegel, Drosten said he had reevaluated his opinion. 

“When the Alpha variant came, it was very surprising for me. When Delta appeared I was sceptical at first, then with Omicron we had to reorient ourselves again. And since January there have already been new Omicron subtypes.

“So I would actually like to correct myself: I no longer believe that by the end of the year we will have the impression that the pandemic is over.”

READ ALSO: End is in sight for pandemic in Germany, says virologist 

Drosten also said that Germany will not see a largely Covid-free summer, which has been the case in previous years, and a further increase in infections in autumn. 

“We are actually already seeing an exponential increase in case numbers again,” Drosten said.

“The BA.5 variant (of Omicron) is simply very transmissible, and people are losing their transmission protection from the last vaccination at the same time.”

In other countries, he said, when the number of cases become high, hospitalisation and death rates also rise again. “Unfortunately, that will also be the case here,” said Drosten, but added: “Overall, however, far fewer people will become seriously ill and die than in 2021.”

Drosten said he expected many more infections from September.

“I hope that the school holidays will dampen the increase in cases somewhat. But from September, I fear we will have very high case numbers,” the head of the virology department at Berlin’s Charité hospital told Spiegel.

READ ALSO: German Health Minister lays out autumn Covid plan

Virologist Christian Drosten at a Covid press conference in 2021.

Virologist Christian Drosten at a Covid press conference in 2021. Photo: picture alliance/dpa | Kay Nietfeld

If the government does not take any action, he predicted there would be a lot of sick leave across all industries. “That will become a real problem,” he said.

Drosten said he did not expect overcrowded intensive care units in Germany.

But the new BA.5 sub-variant, which is becoming dominant in Germany, may affect people more strongly. 

“The wheel is turning more towards disease again,” said Drosten. It is not true that a virus automatically becomes more and more harmless in the course of evolution. “That makes me even more worried about the autumn,” he said.

Drosten recommends wearing masks indoors during the colder months, saying it is “the least painful” measure.

If, in addition, “up to 40 million people could be immunised or given a booster vaccination” before winter, for example by urgently calling for company vaccinations, that would “really make a difference”, Drosten said.

In the long term, he said it’s inevitable that people will become infected with coronavirus.

He said the population immunity due to vaccinations and infections will at some point be so strong that the virus will become less important. “Then we will be in an endemic state,” said Drosten. In the worst case, however, this could take “several more winters”.

However, Drosten warned against people trying to deliberately infect themselves with Covid, saying getting the infection in summer doesn’t mean people will be protected in winter. 

Drosten himself said he has not yet contracted Covid-19.

“So far, I guess I’ve just been lucky,” he said. “I rarely put myself in risky situations, but I’m not overly cautious either.”

‘Pandemic depends on behaviour’

According to the Robert Koch Institute (RKI)’s latest weekly report, more outbreaks are occurring in care homes, and the number of patients in intensive care units is slightly rising as infections go up. 

The institute said there had been a 23 percent increase in the 7-day incidence compared to the previous week. On Friday the 7-day incidence stood at 618.2 infections per 100,000 people. There were 108,190 infections within the latest 24 hour period and 90 deaths. 

“The further course of the pandemic depends not only on the occurrence of new virus variants and the uptake of vaccinations on offer, it also depends to a large extent on the behaviour of the population,” said the RKI.

According to the DIVI intensive care register, the number of Covid-19 patients in ICUs had increased to 810 on Thursday this week, from about 600 at the beginning of the month.

However, that number is still low compared to previous Covid peaks when thousands of people were in intensive care in Germany.