Frankfurt–German airline group Lufthansa says it has backup plans ready in case shareholders reject a nine-billion-euro ($10.1 billion) pandemic rescue plan agreed with the state.
Like rival airlines, Lufthansa was plunged into crisis after efforts to contain the coronavirus brought air travel to a near standstill for several months this year.
“If the shareholder meeting does not give its approval for the federal government’s stabilization measures, we have made extensive preparations,” chief executive Carsten Spohr said in a letter sent to employees Sunday and seen by AFP.
Investors are to meet Thursday to sign off on the rescue that was hammered out in arduous talks with Berlin and which would see the government climb aboard with a 20-percent stake and an option on five percent more.
But with shareholders representing just 38 percent of Lufthansa’s capital registered to participate in the meeting, two-thirds backing will be needed to approve the plan rather than a simply majority if turnout were higher.
Rail industry tycoon and German billionaire Heinz-Hermann Thiele has in recent weeks built up a 15-percent stake in Lufthansa, making him the group’s largest single shareholder and raising fears he could block the government deal.
Thiele told the Frankfurter Allgemeine Zeitung daily last week that his grab for shares was “not a signal that I will vote against anything,” but added that “not all the possibilities were exhausted” in bosses’ talks with Berlin.
Economy Minister Peter Altmaier and Finance Minister Olaf Scholz are to meet with Thiele and Lufthansa representatives for last-ditch talks later on Monday, sources told AFP.
Thiele in particular objects to the state taking a stake in Lufthansa, and has pointed out that Air France-KLM received state aid in the form of loans rather than government shareholdings.
If Lufthansa’s shareholders reject the rescue package, the group—which also includes Swiss, Austrian and Brussels Airlines—could be forced to launch insolvency proceedings.
Spohr said the company would continue to “discuss options with the government” until the very last moment and vowed to do everything necessary to avoid grounding the fleet again.
“Our goal of course remains to avoid insolvency and all its consequences,” Spohr wrote in the letter, adding that he felt a “great responsibility” towards Lufthansa’s 138,000 employees.
To ease some of the uncertainty, Spohr said Lufthansa was taking the unprecedented step of paying employees their June salaries several days early.
Shares in Lufthansa were down 5.5 percent at 9.61 euros at around 0930 GMT on Monday, the first day the firm was trading on the mid-sized MDax index after coronavirus-related losses edged it out of the prestigious DAX 30.