LUFTHANSA AIRLINE MIGHT GO BANKRUPT

The largest European airline is seriously considering the option of filing for bankruptcy. This was reported by one of the members of the Coordinating Board in an interview with a German media.

The members of the Board believe that bankruptcy has an advantage over the state aid. In particular, in the event of recognition of the insolvency, the reimbursement of airfare, which is estimated at 1.8 billion euros, might be suspended. It will also facilitate the dismissals and closure of loss-making subsidiaries. However, the bankruptcy has a significant minus - more than 10 thousand employees will lose their jobs.

We should recall that for several weeks, Lufthansa has been losing 1 million euros per hour. The company has reserves of 4 billion euros, but at this rate, they will be fully expended by the autumn.

According to the experts, the air carrier may go bankrupt by 2021.

It is necessary to note that Lufthansa has refused from the state support for 9 billion euros on May 27. The fact is that the European Commissioner demanded the rights to take off and land for the competitors' liners at the airports of Munich and Frankfurt. The company could not agree to this, since these measures would lead to a weakening of the nodal functions of the home airports. Germany also demanded a 20% stake in the company, which could be done through the additional share issues.

The airline refused - this meant a refusal from the state’s help as well. At the same time, the trade unions sided with Lufthansa, condemning the policy of the German authorities and noting that the companies were offered unattractive and even detrimental conditions, in comparison with Air France or Alitalia that received the state support almost for free.

The Supervisory Board believes that in the event of bankruptcy, the company will retain self-government, which is better than the dubious state support.

The interlocutor of the German Focus magazine noted that the refusal from help would be a sign for the federal government to hold talks with Brussels once again.

We should recall that since the beginning of the pandemic, 87 thousand Lufthansa employees have switched to the part -time regime. The company's pilots stated they were ready for the cut of the salaries provided that Lufthansa would not file for bankruptcy.