No rescue deal yet for German airline Lufthansa – sources

BERLIN (Reuters) – Lufthansa (LHAG.DE) has not yet agreed on a 9 billion euro (7.82 billion pounds) rescue package, company and government sources said on Tuesday, following a report overnight that said an agreement was complete.

FILE PHOTO: Two Airbus A320neo airplanes of German carrier Lufthansa are parked as air traffic is affected by the spread of the coronavirus disease (COVID-19), in Frankfurt, Germany, March 23, 2020. Arne Dedert/File Photo

Lufthansa declined to comment and a spokeswoman for the economy ministry had no immediate comment.

Shares in the airline were up 6.9% at 0655 GMT which traders attributed to prospects of a nearing deal amid time pressure to stem ongoing losses.

The company has issued stark warnings about its solvency amid a gloomy outlook for the industry.

News outlet Business Insider had cited company sources as saying that Berlin would help the airline in return for a blocking minority and one or two supervisory board mandates.

It said representatives of the government and the airline had agreed on those points on Monday but Lufthansa CEO Carsten Spohr had not officially taken part in the discussions.

It said Spohr wanted to formally seal the deal with Chancellor Angela Merkel and Finance Minister Olaf Scholz on Tuesday.

Last week Reuters reported people close to the matter as saying that Lufthansa aimed to finalise a state aid rescue package worth up to 10 billion euros this week after the coronavirus crisis forced it to ground almost all its planes.

This month Spohr said Lufthansa would seek state aid in Austria, Belgium, Germany and Switzerland, citing cash burn at a rate of 1 million euros per hour, meaning that the airline’s 4 billion euro cash reserves will be inadequate.

Transport Minister Andreas Scheuer said on Monday he favoured protecting and supporting Lufthansa but stressed the airline must remain able to operate flexibly.

Politicians had said on Sunday that Germany’s ruling coalition was divided over whether the state should have a role in running Lufthansa in return for a rescue package.

Reporting by Michelle Martin, Christian Kraemer, Ilona Wissenbach, Andreas Rinke, writing by Vera Eckert in Frankfurt; editing by Thomas Seythal and Jason Neely

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