Austria says it might demand Lufthansa stake for Austrian Airlines aid

Austria says it might demand Lufthansa stake for Austrian Airlines aid

May 9, 2020 Off By stuartsupplies

Austria might demand a stake in Lufthansa (LHAG.DE) in exchange for granting emergency aid to the German flag carrier’s unit Austrian Airlines, the country’s conservative chancellor, Sebastian Kurz, said on Wednesday.

Kurz met Lufthansa Chief Executive Carsten Spohr in Vienna on Wednesday, a meeting he said Spohr requested and was their first face-to-face discussion of a bailout.

“Aid without advantages for Austria as a business location, without a stake in Lufthansa, just for the sake of it, is not going to happen,” Kurz told national broadcaster ORF after the meeting.

Kurz is under pressure from opposition parties to take a stake in Lufthansa. When pressed on whether Austria would do that, however, he appeared to say there were various options.

“We want to achieve the maximum for Austria as a place to do business, we want to protect Austrian employees at Austrian Airlines as much as possible, and what can be the right way to do that is something we will look at. Today was the first discussion. Negotiations start now,” he told ORF.

While Lufthansa is in talks with the German government over a 9 billion-euro ($9.8 billion) rescue package, Austrian Airlines has applied for 767 million euros in funding from Austria, much of it in the form of loans and the remainder in grants that have yet to be negotiated.

While Austrian is eligible for government coronavirus aid schemes, it is asking for more than what is usually available – loans guaranteed to 90% by the state are normally capped at 120 million euros or three months’ revenue, though the public agency administering that aid can sign off on larger amounts.

Based on Lufthansa’s annual report here for 2019, a quarter’s revenue for Austrian would be around 527 million euros. Austrian Airlines also has around 7,000 staff.