German Economy Minister Peter Altmaier has pledged that the government will add to keeping the country’s flagship air carrier Lufthansa afloat amid the ongoing COVID-19 pandemic.
"Lufthansa, like other companies, is part of our economy's family silver. That's why we'll prevent this […] from being sold out”, he told the German newspaper Bild on Thursday.
The economy inmister also vowed that the government will “defend" itself "against foreign investors who think they can get bargain prices for famous and renowned German companies”.
The statement comes a few days after Der Spiegel reported that Lufthansa is seeking a €10 billion ($10.7 billion) bailout from the government in exchange for a hefty stake in the airline. The German magazine also cited the air carrier’s complaints about losing as much as €1 ($1.07 billion) million an hour due to the COVID-19 lockdown.
The proposal reportedly stipulates that the government will hold over half of the stake, €5.5 billion ($5.9 billion), as a silent partner, with a guaranteed return on the sum amounting to 9%.
According to Der Spiegel, the state-owned development bank Kreditanstalt for Wiederaufbau (KFW) is expected to inject another €3.5 billion ($3.7 billion), in a move due to be backed by the German government.
The developments followed crisis-hit Lufthansa announcing in late April that it was in "intense negotiations" with various European governments over potential funding and is reportedly expecting aid from Austria and Switzerland in addition to Germany.
This was preceded by Lufthansa CEO Carsten Spohr stating earlier in April that the company is losing as much as €1 million ($1.1m) an hour, and that its jets are currently carrying fewer than 3,000 people every day, down from the usual daily traffic of 350,000 passengers. The decline comes amid the coronavirus pandemic, described by Spohr as the biggest challenge in the company's 65-year history.
He said that the German airline giant entered the crisis with financial reserves of around €4 billion ($4.37 billion), but it “will not be able to survive this increasingly longer lasting crisis without state support”.