Lufthansa shareholders yesterday approved a bailout package from the German government worth €9 billion (£8.1 billion/$10 billion) after earlier doubt that the plan would be passed.
Earlier in the week, a major shareholder alarmed the government and airline suggesting that he would block the plan. Heinz-Hermann Thiele owns 15.5% of the airline shares and resisted the conditions imposed on the rescue package.
The German government has insisted on a 20% stake in the airline and two members on the board. For a staunch capitalist, this was probably represented too much government interference and Thiele preferred a more indirect approach via government-guaranteed loans.
In any event, Thiele was persuaded otherwise and voted for the proposal. And not a moment too soon. 80% of the airline’s aircraft are grounded and the Chairman Karl-Ludwig Kley told the meeting ‘We are living from the reserves we set aside in good years. Without support, a bankruptcy looms in the next few days.‘
LH isn’t out of the woods yet. Neither are the other carriers in the Group stable: Brussels, Swiss and Austrian airlines. The CEO Carsten Spohr has said that the airline faces a ‘new normal’ of reduced demand for several years. Once the situation has stabilised, the government has said it would dispose of its 20% shareholding and presumably remove its two directors.