Economy

Lufthansa’s biggest nightmare is currently coming true in France

Airplanes stand at Air France’s home airport in Paris

bellena / Shutterstock.com

Lufthansa has resisted for a long time. But now Germany’s largest airline apparently wants to give in. If this happens, as “NewsABC.net” and later “Spiegel” reported, the federal government not only helps with a loan of nine billion euros, but also participates directly in the company, with 25 percent plus one share and two supervisory boards.

Lufthansa boss Carsten Spohr had warned that his company needed state support, but it would be better not to have state management. The case of France is currently showing what the latter can lead to. A nightmare for Lufthansa.

Also read: “He’s in the back of his own government”: Transport Minister Scheuer interferes in Lufthansa negotiations

Corona rescue: Air France is ahead of Lufthansa

Like Lufthansa, the French-Dutch airline Air France KLM has drastically reduced its daily flight capacity. Like Lufthansa, Air France KLM is urgently dependent on financial aid. And like Lufthansa, Air France KLM turned to the state.

And France helped. Air France KLM receives a bank loan of four billion euros, which is largely guaranteed by the state, and a loan of three billion euros in direct state loans. In addition, the Dutch government is providing two to four billion euros for the sister airline KLM.

However, the money comes with conditions that Lufthansa could hardly accept, but which the French finance minister Bruno Le Maire deems necessary in the case of Air France. After all, the aid is not a blank check, as Le Maire said in a video conference at the end of April: “Air France’s goal must be to become the airline that guarantees the most sustainable protection of the planet.”

What that means? France’s Environment Minister Élisabeth Borne explained this in an interview with “France Inter”. Accordingly, Air France should become significantly more environmentally friendly. Among other things, the airline is to drastically reduce the number of flights on routes that are also served by high-speed trains in less than two and a half hours.

Air France deal: these are the conditions

In addition, state aid is subject to the following conditions:

  • Air France needs to become more profitable and competitive.
  • Air France is to reduce its CO2 emissions on long and medium-haul routes by 50 percent per passenger and kilometer by 2030; on flights within France even until 2024.
  • By 2025, at least two percent of the fuel should come from a climate-neutral source.
  • The long-haul and medium-haul fleet is to be renewed in the next few years, for example through the use of the new Airbus models A220 and A350, which emit up to 25 percent less CO2.

In short: France wants to get involved when it comes to the future strategic direction of its largest airline. Lufthansa does not have to fear so much intervention.

In the ZDF program “Berlin Direkt”, Federal Minister of Economics Peter Altmaier put only two conditions on Sunday. First: Lufthansa has to repay the billion dollar government loans, “as soon as [sie] is back in the profit zone ”. And Germany would only make use of the blocking minority of 25 percent plus one share “when it comes to preventing takeover attempts”.

These German companies have applied for government aid because of the Corona crisis

This article has been updated.

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