Lufthansa Group received approval from the German government’s economic stabilisation fund, WSF, on 25 May for a rescue deal under which the fund would take a 20% stake in the company.
Under the agreement, the WSF will contribute up to €5.7 billion to Lufthansa’s assets including €4.7 billion in equity. The measure will be supplemented by a syndicated three-year credit facility of up to €3 billion, provided by private banks and KfW. The package is subject to regulatory approval.
The European Commission has already waved through France’s plan to provide €7 billion of government-backed loans to help Air France-KLM Group through the coronavirus crisis, as well as Sweden’s plan to issue SKr5 billion ($520 million) of government-guaranteed loans to its airlines. These approvals were provided under the Commission’s temporary framework of relaxed state-aid rules.
Ryanair argues that Lufthansa’s government finance package would “further strengthen” the airline’s “monopoly-like grip on the German travel market”, distorting competition for “non-state-aided airlines like Ryanair, EasyJet, British Airways and others”.
Those three airlines have all taken advantage of the UK government’s Covid Corporate Financing Facility, which was established to assist companies through the pandemic. The Irish budget carrier revealed in its full-year financial results statement that it had raised £600 million ($736 million) under the facility.