The German air carrier is in dispute with the state over the conditions for the payment of a multi-billion-dollar aid package. Lufthansa executives believe bankruptcy may be a better option.
The German aircraft company Lufthansa, in a dispute with the state over the conditions for the payment of a multi-billion-dollar aid package, first announced that it was considering the possibility of bankruptcy. A special bankruptcy option, in which the company retains control of its assets, has clear advantages over state aid, explained the representative of the supervisory board of Lufthansa in an interview with Focus magazine, published on Friday, May 29.
Such bankruptcy, for example, will allow Lufthansa to suspend the refund of tickets for a total of 1.8 billion euros, as well as simplify the dismissal of staff and the closure of unprofitable subsidiaries. As a result, not up to 10 thousand people can lose their jobs, but much more.
“The rejection of the assistance package will signal the federal government about the need for new negotiations with Brussels,” Focus quotes one of the members of the supervisory board of Lufthansa.
Lufthansa, according to its estimates, currently incurs a loss of € 1 million per hour. This means that reserves of 4 billion euros will be spent in the fall. Therefore, bankruptcy while maintaining control over own assets will become possible no earlier than 2021.
The Supervisory Board of Lufthansa on May 27 rejected the conditions for providing a state aid package. According to reports, this was caused by the requirement of the EU competition commissioner Margrethe Westager that the German aircraft concern, in exchange for state aid, cede competitors the right to take off and land aircraft.