Lufthansa’s supervisory board approves bailout

Lufthansa’s Supervisory Board has accepted the revised terms of a proposed EUR9 billion euro (USD9.9 billion) bailout although the funding must still clear a shareholders vote set for June 25. “It was a very difficult decision. After intensive discussion, we have come to the conclusion to agree to the Executive Board’s proposal. We recommend that our shareholders follow this path, even if it requires them to make substantial contributions to stabilizing their company. It must be clearly stated, however, that Lufthansa is facing a very difficult road ahead,” Chairman of the Supervisory Board Karl-Ludwig Kley said. The Supervisory Board initially rejected the bailout after the European Commission signalled it would only approve the assistance in return for substantial compensatory measures in the form of slot releases. After negotiations, the Commission relaxed its requirements with Lufthansa to “only” release 24 slot pairs at each of its two hubs at Frankfurt Int’l and Munich airport through a bidding process. However, for the first 18 months, the slots will only be available to new competitors. And only if they are unclaimed will they then become available to airlines already flying to the German gateways. The Extraordinary General Meeting (EGM) on June 25, which will be held via videoconference, will focus solely on the proposed bailout.