German Chancellor Angela Merkel has said there will be a decision "soon" on a potential rescue program for airline giant Lufthansa. The carrier was seeking capital as it struggles to cope with the coronavirus pandemic.
The carrier is seeking to tap Germany's economic stabilization fund to help it through the coronavirus pandemic, with a protracted travel slump expected even as lockdowns are relaxed across Europe. However, the decision was reportedly held up because of reported disagreements within government about what any package would look like.
"You should expect a decision soon, but it has to be ready first," Merkel said in Berlin on Wednesday evening, declining to comment any further on reports that the federal government had made a new offer to Lufthansa bosses.
Earlier on Wednesday, the news magazine Der Spiegel reported that ministers in charge of any decision had put the finishing touches on the bailout package. A government official on his way to Frankfurt to seal the deal with airline managers, the magazine reported.
At the time, Lufthansa said the package included a non-voting capital component, known as a so-called silent participation,a secured loan,and a capital increase that would leave the government with a shareholding of up to 25% plus one share. That amount of ownership would protect the airline, Germany's national carrier, from any hostile takeover.
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The question of whether the state should be represented on Lufthansa's decision-making bodies in exchange for the capital injection has divided Merkel's grand coalition spanning the center-right and center-left.
Pro-business politicians from the chancellor's conservative Christian Democrats have rejected representation, saying government should not interfere with the management of the airline.
Around 90% of Lufthansa's regular flights have been grounded for several weeks amid the pandemic, the company is estimated to be losing in the region of a million euros an hour at present.
rc/msh (AFP, dpa, Reuters)