Lufthansa "unable" to approve rescue package over EU conditions

Deutsche Lufthansa AG's Supervisory Board said Wednesday that it was unable to approve the German government's nine-billion-euro stabilization package in light of the conditions offered by the European Union. The board also said it had to postpone a general meeting with shareholders for the time being.

Lufthansa announced on Monday that the German government's Economic Stabilization Fund (WSF) had approved the nine-billion-euro rescue package to help the troubled airline weather the coronavirus crisis.

The package needs the final approval of the company's Management Board and Supervisory Board, and the capital measures are subject to the approval of an extraordinary general meeting with shareholders, the company said on Monday.

Furthermore, the package is subject to the approval of the European Commission and must meet all competition-related conditions, the company also said.

Following its meeting on Wednesday, the Supervisory Board said that the conditions set by the European Commission would lead to a weakening of the hub function at Lufthansa's home airports in Frankfurt and Munich.

The resulting economic impact on the company and on the planned repayment of the stabilization measures, as well as possible alternative scenarios, must be analyzed intensively, Lufthansa said.

However, it also noted that the Supervisory Board continues to regard the WSF stabilization measures as "the only viable alternative for maintaining solvency."

The group's revenues fell by 18 percent to 6.4 billion euros in the first quarter of this year, with revenues down 47 percent in March alone, largely due to the coronavirus-related travel restrictions.