Lufthansa is close to sealing state support valued at close to $10bln, according to sources.
Julian Satterthwaite reports.
Lufthansa is closing in on a state rescue deal.
That’s according to government and company sources.
The package would be valued at 9 billion euros, or almost ten billion dollars.
There’s no timing for an agreement yet though.
Sources said Chancellor Angela Merkel and company chief Carsten Spohr were likely to talk Tuesday (April 28).
The news sent Lufthansa shares as much as 12 percent higher in morning trade, though they soon eased back.
Earlier news outlet Business Insider said Berlin would help the carrier in return for a blocking minority on its board.
That’s a thorny issue for Merkel’s coalition government.
Her conservative party wants to leave Lufthansa largely free of interference.
Bavarian leader Markus Soeder spoke Tuesday: (SOUNDBITE) (German) BAVARIAN PREMIER MARKUS SOEDER, SAYING: "If the state helps to prop up Lufthansa then it can't then end up with Lufthansa being nationalized.
Or end up with politicians having the last say on how Lufthansa is run.
Lufthansa has proved itself to be a competitive company and as far as I am concerned the CEO is doing an exceptional job." But the Social Democrats want the state to share in ownership to influence decision making.
With almost all its planes grounded, Lufthansa has issued stark warnings about its solvency.
Spohr says it’s burning cash at a rate of 1 million euros per hour.
Right now it’s only carrying one percent of the passengers who travelled this time last year.
Some rival airlines in Europe, including Scandinavia’s SAS, have already secured government support.
Even so, it said Tuesday that as many as 5,000 jobs could go.
That’s almost half its workforce.
Airbus has warned staff it is bleeding cash and may have to cut jobs. Julian Satterthwaite reports.