Lufthansa's supervisory board said in a statement early Saturday it had decided to accept an agreement reached with Germany and the European Union to rescue the struggling German airline. Negotiations had gone on all week and media reported late Friday that a pact had been made.
The Lufthansa group, which includes Brussels, Austrian and Swiss Airlines, has been losing around €1 million ($1.1 million) every hour since the coronavirus pandemic hit Europe, with 90% of its fleet grounded and travel bans still in place across much of the continent.
Lufthansa announced that part of the deal involves ceding take-off and landing rights to competitors at major hubs in Frankfurt and Munich, as well as giving up aircraft to competitors. An extraordinary meeting of the Lufthansa group was planned for the coming days to discuss the restrictions put in place.
The €9 billion rescue package sees the German government take over 20% of shares in the airline. The deal makes the German government the company's biggest shareholder. The Lufthansa group and the European Commission's competition watchdog must still green-light the deal.
Lufthansa previously said it would be unable to approve the rescue package over fears that the conditions imposed by the EU would be too harsh. The new deal was described as a "compromise" between the wishes of Germany, the EU and the airline.
The German government said that Lufthansa was profitable before the pandemic, but some have criticized Berlin's decision to bail out the group.
The deal between Berlin and Brussels took so long to hash out because German Chancellor Angela Merkel was keen to minimize federal control of the group.
The Lufthansa bailout is the biggest by the German government in the wake of the coronavirus pandemic.
ed/dr (AFP, dpa)