Germany’s largest airline, Lufthansa, is set to receive a $10.8 billion bailout from the German government so as to remain afloat during the COVID-19 pandemic that has punctured the aviation industry revenues.
According to the airline, the bailout will consist of equity from Germany’s new economic stabilization fund (ESF), of state-guaranteed loans from Germany, and debt supplied by Austria, Switzerland, and Belgium, where the airline’s subsidiaries are based.
Thereafter, the bailout will give the government a stake in the airline, seats on its supervisory board, and influence to block strategic decisions.
The airline’s Chief Executive Officer, Carsten Spohr, warned that the carrier could face a liquidity crunch in a few weeks and would need state aid after reporting a first-quarter loss of $1.3 billion.
Lufthansa is the flag carrier and largest German airline, which, when combined with its subsidiaries, is the second-largest airline in Europe in terms of passengers carried. Its subsidiary passenger airlines include Austrian Airlines, Swiss International Air Lines, Brussels Airlines, and Eurowings.
In total, the group has over 700 aircraft, making it one of the largest airline fleets in the world.
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