Lufthansa has secured a Covid-19 bailout package of up to €9 billion from the German government.
The package will see the German state take a 20% stake in Lufthansa, worth around €300 million, which can be increased to 30%. The government will also loan up the carrier up to €5.7 billion until 2027 at rates of interest between 4% and 9.5%.
The terms of the deal mean the German state will sell its shareholding at the market price by the end of 2023 if the loans have been repaid. Conditions include no dividend payments to shareholders and restrictions on the amount of management pay and rewards. The government will also appoint two board members.
The package will be voted on by Lufthansa’s current board and will need to be approved by the European Commission.
Germany’s Finance Minister Olaf Scholz told the BBC the support was for a limited period: "When the company is fit again, the state will sell its stake and hopefully ... with a small profit that puts us into a position to finance the many, many requirements which we have to meet now, not only at this company."
Airlines in the UK are lobbying for similar support, but talks on the issue have so far been kept under wraps, with transport secretary Grant Shapps saying only that discussions were ongoing.