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ixam500
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Lufthansa: 10B EUR bailout - Update

Fri May 01, 2020 10:34 am

Greetings from Germany!

According to this arcticle: https://www.finanzen.net/nachricht/aktien/mitspracherecht-gefordert-lufthansa-aktie-staat-will-angeblich-direkt-in-zweistelliger-milliardenhoehe-einsteigen-8816258

Lufthansa should receive a 9.5 billion Euro bailout, this will include:
    5 billion from the federal government in form of a silent partner's interest; the federal governmet will receive a 9% guaranteed dividend on this
    1 billion in new Equity, the federal government will receive a 25,1% stake in the company
    3,5 billion in form of a loan from government-owned KFW-Bank

However, neither Lufthansa, nor the federal government, have released a statement/comment regarding the article.
 
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Re: Lufthansa: 10B EUR bailout - Update

Fri May 01, 2020 12:50 pm

We should make no bones about it: the big legacies will use this opportunity to eliminate LCC competition. Just as the Mega Corps will use this to eliminate small business competition.

You don't deserve choice.
© 2020. All statements are my own. The use of my statements, including by journalists, YouTube vloggers like "DJ's Aviation", etc. without my written consent is strictly prohibited.
 
marcelh
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Re: Lufthansa: 10B EUR bailout - Update

Fri May 01, 2020 9:33 pm

GEUltraFan9XGTF wrote:
We should make no bones about it: the big legacies will use this opportunity to eliminate LCC competition. Just as the Mega Corps will use this to eliminate small business competition.

You don't deserve choice.

The legacies fly intercontinental, those LCC are just a Greyhoud/Flixbus with wings flying intra Europe. Ryanair, EasyJet and WizzAir will do fine after Covid-19
 
oldJoe
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Re: Lufthansa: 10B EUR bailout - Update

Fri May 01, 2020 10:41 pm

Spohr already said in the last days what conditions he can accept and at what piont he prefers bunkrupcy.
 
Amsterdam
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Re: Lufthansa: 10B EUR bailout - Update

Fri May 01, 2020 11:06 pm

Spohr cant decide to let such a company that is not even his own go bancrupt.
German government, shareholders, millions of germans, creditors, 140.000 employees etc vs 1 man (or maybe a couple of them) who doesnt own the company.

He said was he said as a message, nothing more.
 
oldJoe
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Re: Lufthansa: 10B EUR bailout - Update

Fri May 01, 2020 11:40 pm

Amsterdam wrote:
Spohr cant decide to let such a company that is not even his own go bancrupt.
German government, shareholders, millions of germans, creditors, 140.000 employees etc vs 1 man (or maybe a couple of them) who doesnt own the company.

He said was he said as a message, nothing more.


I clearly undertand you and to be honest I don`t like him very much , to say at least.
At the current moment he has the power to bring LHG in insolvency under protection. I very much doubt that this is the better outcome for the German government and all this hard working employees. Even the rude fighting Unions are begging right now , that this is not the outcome. Kind of gambling for sure !
 
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Phosphorus
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 7:17 am

Amsterdam wrote:
Spohr cant decide to let such a company that is not even his own go bancrupt.
German government, shareholders, millions of germans, creditors, 140.000 employees etc vs 1 man (or maybe a couple of them) who doesnt own the company.

He said was he said as a message, nothing more.


1) any chief executive has a power to apply for bankruptcy protection, if the conditions are met. Politics notwithstanding.
2) in many jurisdictions, including a plurality of civil law jurisdictions (I know Switzerland is one; don't know for sure if Germany is, but I would suspect so) the management is criminally liable, if they do not file for bankruptcy, if proscribed conditions are met (either liabilities exceeding assets, or technical insolvency of having insufficient liquidity to cover the bills due). There is a time window, before having learned of company being bankrupt, and appearing in front of the judge, that allows the management to stay innocent.

From legal point of view, I would suspect a great plurality of airlines in the world, one way or the other, are technically bankrupt. Maybe even majority. Possibly most of them.

An airline surely can't meet its current obligations, if it routinely refuses to refund cash for tickets for canceled flights, claiming "it's a crisis out there, no cash available". "No cash available" to repay your debt is insolvency.

So, the fact that airlines (including LH) are not filing for bankruptcy, for now, is indeed a choice; and actually a personal risk for many an executive.
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Cavanjets
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 7:28 am

Despite the circumstances, how can this aid not be in breach of EU competition rules?
 
aircatalonia
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 7:45 am

Regardless of whether it's fair or not to rescue those who are "too big to fail" (probably it isn't), I do think that it is a very good moment to invest in airlines. They can't possibly go any lower.
 
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Phosphorus
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 7:57 am

aircatalonia wrote:
Regardless of whether it's fair or not to rescue those who are "too big to fail" (probably it isn't), I do think that it is a very good moment to invest in airlines. They can't possibly go any lower.

In the US, a Chapter 11 reorganization most typically* wipes out old shareholders. Airline emerges, but pre-bankruptcy stock is worthless.

*Sometimes, there are exceptions. Hawaiian Airlines famously went through a bankruptcy, and emerged, with pre-bankruptcy shares valid. Employees reportedly hated the guts of their CEO, as in their opinion, it was they who paid most of the bill, instead of shareholders.

Other jurisdictions might be different.
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sabenapilot
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 8:17 am

Cavanjets wrote:
Despite the circumstances, how can this aid not be in breach of EU competition rules?


EU anti-competition rules do not forbid:

1- a government holding or even taking up a shareholding in a company (see for instance the Dutch and AF-KLM a year ago...)
https://www.bbc.com/news/world-europe-47386140

2- to provide loans to any company in need, either through direct public financing or via guarantees of bank loans, provided such is done at market conditions.


What has changed is that until recently, EU governments have always upheld a common policy of not doing the above (to the exception of Italy with Alitalia and The Netherlands with KLM) to avoid being seen as favouring certain companies over others and so the idea has creaped in the minds of people that it was as good as forbidden for goverments to do so under EU rules, but it never was: it was far more a general policy than it is a rule.

If the German government now wants to buy stocks of Lufthansa and provides them further with a loan (at market conditions) because they think this is a good thing for Germany, then this will be approved by the EC. Nothing illegal about it. The government is under no legal obligation to do so for other companies too because of this either: it remains the prerogative of any EU goverrnment to chose what they spend government money on, provided this is done according the spending rules of the country.
 
marcelh
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 8:23 am

Cavanjets wrote:
Despite the circumstances, how can this aid not be in breach of EU competition rules?

It's just like Animal Farm: "All companies are equal, but some are more equal than others". And a company like Lufthansa is considered as "strategic infrastructure" and essential to a member of the EU.
Also read this: https://ec.europa.eu/info/sites/info/files/communication-coordinated-economic-response-covid19-march-2020_en.pdf
 
LJ
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 10:05 am

Waterbomber2 wrote:
marcelh wrote:
Cavanjets wrote:
Despite the circumstances, how can this aid not be in breach of EU competition rules?

It's just like Animal Farm: "All companies are equal, but some are more equal than others". And a company like Lufthansa is considered as "strategic infrastructure" and essential to a member of the EU.
Also read this: https://ec.europa.eu/info/sites/info/files/communication-coordinated-economic-response-covid19-march-2020_en.pdf


Yes how else will all the German businessmen get to Ibiza for their cocktail on the beach?
What about corporate managers and their essential travel to the Maldives?


You assume that they continue serving those destinations.

Waterbomber2 wrote:
Liquidate leisure-oriented Eurowings and Brussels Airlines, cut all the leisure routes and we can talk about "strategic infrastructure".


We don't know how much of Eurowings will remain. The last time LH Group planned a much smaller fleet than they currently have.
 
Arion640
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 10:07 am

Wow. Glad i’m not a German taxpayer.
1973-2020
 
marcelh
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 10:23 am

Waterbomber2 wrote:
marcelh wrote:
Cavanjets wrote:
Despite the circumstances, how can this aid not be in breach of EU competition rules?

It's just like Animal Farm: "All companies are equal, but some are more equal than others". And a company like Lufthansa is considered as "strategic infrastructure" and essential to a member of the EU.
Also read this: https://ec.europa.eu/info/sites/info/files/communication-coordinated-economic-response-covid19-march-2020_en.pdf


Yes how else will all the German businessmen get to Ibiza for their cocktail on the beach?

They can take Ryanair, TUI, EazyJet.

What about corporate managers and their essential travel to the Maldives?

QR and EK will fly them to the Maledives with all the luxury they have to offer.

Liquidate Brussels Airlines

Looking at the historic ties Belgium has with Africa and the strong presence of Brussels Airlines, the Belgian government might see it as essential.

The only strategy the current strategic infrastructure points to is desire for world dominance.
Do I need to refer you to the history books?

Yes show me.
 
leghorn
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 12:11 pm

I've sent an e-mail of complaint to Angela Merkel and Olaf Scholz.
I pay too much tax for it to be directed to Lufthansa for them to then use the money to drive competition off the routes which I use regularly and then in the long term drive up ticket prices.
Is it an effective means of complaint? Probably not. Is it any more effective than bitching about Lufthansa on this forum? Probably.
 
RvA
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 1:47 pm

Waterbomber2 wrote:
marcelh wrote:
Cavanjets wrote:
Despite the circumstances, how can this aid not be in breach of EU competition rules?

It's just like Animal Farm: "All companies are equal, but some are more equal than others". And a company like Lufthansa is considered as "strategic infrastructure" and essential to a member of the EU.
Also read this: https://ec.europa.eu/info/sites/info/files/communication-coordinated-economic-response-covid19-march-2020_en.pdf


Yes how else will all the German businessmen get to Ibiza for their cocktail on the beach?
What about corporate managers and their essential travel to the Maldives?

Liquidate leisure-oriented Eurowings and Brussels Airlines, cut all the leisure routes and we can talk about "strategic infrastructure".

The only strategy the current strategic infrastructure points to is desire for world dominance.

Do I need to refer you to the history books?


So because airlines fly routes you’ve determined to be leisure routes they cannot be strategic infrastructure? So do the leisure routes cancel the other routes out?
So what about leisure airlines, they are allowed to exist but should not be competed with?

Please refer me to the history books please and pass me whatever you’re on as well it seems good.
 
RvA
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 1:53 pm

leghorn wrote:
I've sent an e-mail of complaint to Angela Merkel and Olaf Scholz.
I pay too much tax for it to be directed to Lufthansa for them to then use the money to drive competition off the routes which I use regularly and then in the long term drive up ticket prices.
Is it an effective means of complaint? Probably not. Is it any more effective than bitching about Lufthansa on this forum? Probably.


Good. Taking action like that no matter what your opinion is is to be encouraged.

Interesting point btw, analysis in the Netherlands showed that the government earns considerably more than the €29 profit per passenger that KLM earns. They earn this on a wide variety of taxes (kerosene, income taxes etc.) so the government investing in an airline’s survival/future actually ensures they keep that income flow. So actually not investing and letting in this case LHG fall over isn’t in the government’s interest as unless another airline replaces LHG 1:1 the government will be losing income longer term and end up even paying more in the short/mid term having to deal with all the redundancies etc.
 
GLANKG
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 02, 2020 7:24 pm

Other than email, there is general election next year too.
 
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Executor
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Lufthansa seeking € 9 bn stabilization package

Thu May 07, 2020 3:15 pm

As it has been discussed widely, Lufthansa needs money and is now officially negotiating an assistance package from the German government.

LH press release : https://newsroom.lufthansagroup.com/Eng ... d90a916b4c

Reuters : https://www.reuters.com/article/us-luft ... SKBN22J24U

Interestingly, both mention a "silent participation" from the government and a secured loan. Furthermore, the Federal Economic Stabilization Fund will likely get seats at the supervisory board.

Is a a middle way between the original proposal (with seats for the government at the supervisory board and involvement in the management) and what Carsten Spohr wanted?
 
leghorn
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 9:07 pm

https://www.sueddeutsche.de/wirtschaft/ ... -1.4894097
warning: German text.
There is huge hypocrisy here. Lufthansa use Panama and the Caymans companies for something...don't ask wofür, just hand over other taxpayers' money.
Other Countries have stated they will not support companies who engage in aggressive "tax planning".
 
airhansa
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 9:25 pm

Lufthansa is a piece of critical infrastructure for Germany (and much of Central Europe) by being the only real airline. Ideally, a country needs one full service airline and one low-cost airline serving the market, along with maybe a more nimble regional airline (textbook case would be SAS, Norwegian and Wideroe in Norway). If an alternative exists then bailout is not needed.

A crucial question is whether rail travel will eclipse short haul air travel in Europe. This would speed the demise of low cost airlines in Continental Western Europe, but the airlines from Northern Europe and the "islands" will survive as necessity.

I agree that the various airlines of Lufthansa should merge into one major airline brand, except for Eurowings, maybe with the pricing structure of Brussels Airlines (which can act as a "Amsterdam" hub for flights from Northern Europe and the UK). Maybe a merger between KLM and LH would do well, AF can go it alone, and AZ can merge into IAG as a big pile of poop.
 
leghorn
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 9:36 pm

I do not agree that Lufthansa is critical infrastructure. The vacuum would be filled within a very short period of time. There is no sunk infrastructure in the sky.
The airlines of Northern Europe i.e. E.U. member states have every much the same right to survive as Lufthansa and perhaps flourish through agility. It is a cornerstone of the common market that they are given access on a level playing field.
What you envision is that these smaller players pick up the scraps which Lufthansa couldn't be bothered to service but that doesn't stop Lufthansa offering services on the routes which they consider profitable to the more far flung regions in the E.U.
Dublin or Lisbon have just as much right under European Trade laws to be hub airports as Frankfurt or Munich but Germany will use its financial muscle to put those airports and the Airlines based out of them at a disadvantage.

Finally, a low cost airline is a low cost airline and the last time I looked that wasn't a schimpfwort. They have every right to exist and they are obviously very popular with their Customers. Their Customers are not second class citizens of E.U.
 
airbazar
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 9:45 pm

Phosphorus wrote:
An airline surely can't meet its current obligations, if it routinely refuses to refund cash for tickets for canceled flights, claiming "it's a crisis out there, no cash available". "No cash available" to repay your debt is insolvency.


I suspect this is where we have a grey area. An airline is under no obligation to refund non-refundable tickets. It wasn't the passenger's decision to cancel the flights but it wasn't the airline's either. Which is why EU governments and regulators are giving airlines a pass.

Cavanjets wrote:
Despite the circumstances, how can this aid not be in breach of EU competition rules?

There is no EU law against a government investing in a publicly traded company. There's a difference between a subsidy and a loan.
 
RvA
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 9:49 pm

leghorn wrote:
I do not agree that Lufthansa is critical infrastructure. The vacuum would be filled within a very short period of time. There is no sunk infrastructure in the sky.
The airlines of Northern Europe i.e. E.U. member states have every much the same right to survive as Lufthansa and perhaps flourish through agility. It is a cornerstone of the common market that they are given access on a level playing field.
What you envision is that these smaller players pick up the scraps which Lufthansa couldn't be bothered to service but that doesn't stop Lufthansa offering services on the routes which they consider profitable to the more far flung regions in the E.U.
Dublin or Lisbon have just as much right under European Trade laws to be hub airports as Frankfurt or Munich but Germany will use its financial muscle to put those airports and the Airlines based out of them at a disadvantage.

Finally, a low cost airline is a low cost airline and the last time I looked that wasn't a schimpfwort. They have every right to exist and they are obviously very popular with their Customers. Their Customers are not second class citizens of E.U.


For Germany, LH is absolutely crucial infrastructure. And not something easily replaced. The same applies to any major airline and their hub(s).
 
leghorn
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 10:00 pm

No. it is not. The airports are critical infrastructure. If Lufthansa went out of the business those left standing would be all over their routes like a rash.
The thought process would be that if Lufthansa with their outrageous costs can make those routes work then we certainly can too.

Also if it were a critical piece of infrastructure then they shouldn't have been letting it acquire the routes of other airlines which have gone out of business. That is turning critical infrastructure in to hypercritical infrastructure.and painting yourself in to a corner.
It is time to take the old nag out behind the shed and put a bullet in her forehead.
Last edited by leghorn on Sat May 09, 2020 10:04 pm, edited 1 time in total.
 
leghorn
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 10:10 pm

BBC article about state aid and what is allowable: https://www.bbc.com/news/uk-politics-41392469
 
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zkojq
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 10:11 pm

I'm very pleased to see the Federal Government is getting some shares for their assistance to the company. Taxpayers deserve to have some upside benifits to such a deal.

leghorn wrote:
I do not agree that Lufthansa is critical infrastructure. The vacuum would be filled within a very short period of time.


How much emergency PPE has Ryanair, Easyjet and Norwegian brought to the Bundesrepublik?

leghorn wrote:
https://www.sueddeutsche.de/wirtschaft/steuerparadiese-geschaefte-in-panama-1.4894097
warning: German text.
There is huge hypocrisy here. Lufthansa use Panama and the Caymans companies for something...don't ask wofür, just hand over other taxpayers' money.
Other Countries have stated they will not support companies who engage in aggressive "tax planning".


LH is not incorporated in Panama nor the Caymans and it pays Federal taxes. Hopefully one of the strings attached to the Federal government bailout will be the end of using such jurisdictions for subsidiaries in the future.

airhansa wrote:
Ideally, a country needs one full service airline and one low-cost airline serving the market, along with maybe a more nimble regional airline (textbook case would be SAS, Norwegian and Wideroe in Norway). If an alternative exists then bailout is not needed.


Agreed though a large country like Germany should be able to have more than one legacy and LCC operating efficiently.
First to fly the 787-9
 
oldJoe
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 10:26 pm

leghorn wrote:
No. it is not. The airports are critical infrastructure. If Lufthansa went out of the business those left standing would be all over their routes like a rash.
The thought process would be that if Lufthansa with their outrageous costs can make those routes work then we certainly can too.

Also if it were a critical piece of infrastructure then they shouldn't have been letting it acquire the routes of other airlines which have gone out of business. That is turning critical infrastructure in to hypercritical infrastructure.and painting yourself in to a corner.
It is time to take the old nag out behind the shed and put a bullet in her forehead.


Really an airport is the critical infrastructure ? If so than HHN ( as a example ) could be shot down ASAP ! I live in this area and pay my tax ( 40 years ) in the same area for the sake to keep this loss making place alive ? There are alot of this examples around Europe.
Can you imagine if Germany follow the way of the UK and get out of the EU ?
Your tiny island would be as much as importent like in China falls a sack of rice !
At the end of the day Lufthansa is a very important company in Germany , like it or not !
 
leghorn
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 10:31 pm

zkojq wrote:

How much emergency PPE has Ryanair, Easyjet and Norwegian brought to the Bundesrepublik?

LH is not incorporated in Panama nor the Caymans and it pays Federal taxes. Hopefully one of the strings attached to the Federal government bailout will be the end of using such jurisdictions for subsidiaries in the future.


I'll tell you what...If you tell Easyjet or Ryanair that if they provide Protective clothing in lieu of Protection money for unfettered preferential access to the routes in the wealthiest Country in Western Europe then they'll put their entire fleet of hundreds of planes converted in to Preighters at the disposal of the Bundesregierung for a year solid.
Both those LCCs have been performing repatriation flights. Aer Lingus which is one of the Companies which will be driven out of the German market if Lufthansa get their way have already done repatriation flights and brought PPE to Europe. Lufthansa are not deserving of beatification by any stretch of the imagination.

As with any other multi-national Lufthansa manage how much tax they wish to contribute to the pot and aim not to exceed it.
 
majano
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 10:48 pm

oldJoe wrote:
leghorn wrote:
No. it is not. The airports are critical infrastructure. If Lufthansa went out of the business those left standing would be all over their routes like a rash.
The thought process would be that if Lufthansa with their outrageous costs can make those routes work then we certainly can too.

Also if it were a critical piece of infrastructure then they shouldn't have been letting it acquire the routes of other airlines which have gone out of business. That is turning critical infrastructure in to hypercritical infrastructure.and painting yourself in to a corner.
It is time to take the old nag out behind the shed and put a bullet in her forehead.


Really an airport is the critical infrastructure ? If so than HHN ( as a example ) could be shot down ASAP ! I live in this area and pay my tax ( 40 years ) in the same area for the sake to keep this loss making place alive ? There are alot of this examples around Europe.
Can you imagine if Germany follow the way of the UK and get out of the EU ?
Your tiny island would be as much as importent like in China falls a sack of rice !
At the end of the day Lufthansa is a very important company in Germany , like it or not !

Important, yes. But critical?
 
airhansa
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 10:52 pm

leghorn wrote:
I do not agree that Lufthansa is critical infrastructure. The vacuum would be filled within a very short period of time. There is no sunk infrastructure in the sky.
The airlines of Northern Europe i.e. E.U. member states have every much the same right to survive as Lufthansa and perhaps flourish through agility. It is a cornerstone of the common market that they are given access on a level playing field.
What you envision is that these smaller players pick up the scraps which Lufthansa couldn't be bothered to service but that doesn't stop Lufthansa offering services on the routes which they consider profitable to the more far flung regions in the E.U.
Dublin or Lisbon have just as much right under European Trade laws to be hub airports as Frankfurt or Munich but Germany will use its financial muscle to put those airports and the Airlines based out of them at a disadvantage.

Finally, a low cost airline is a low cost airline and the last time I looked that wasn't a schimpfwort. They have every right to exist and they are obviously very popular with their Customers. Their Customers are not second class citizens of E.U.


The point is that in the immediate aftermath there will be a vacuum where there are no alternatives left. It's not similar to the US where several major airlines compete over the same routes. LH has a de facto monopoly in the German speaking world.

To expand on the point I made about LH consolidation, I would prefer for the Lufthansa brand to take over all its subsidiaries except EW, but for the company to retain the hubs (except for BRU which I believe is best replaced with high speed rail services to AMS etc...).

I actually take back what I said about a KLM and LH merger, since I think that KLM is a strong brand and airline that would be wasted by merging with LH. Instead, it would be better for KLM to merge with SAS, since most of the SAS long haul operations already fly from CPH, hence it would be easy to move these flights to AMS and use SAS as a feeder system.
 
leghorn
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 11:03 pm

Don't you think this is the time to grab the nettle. This A. T. & T./Bell type monster needs to be de-fanged and now is an opportune moment.
Anyhow people shouldn't be flying as the pandemic needs to be brought under control.
Reboot. A month shutdown. Two flies with one Swat (to use the German idiom) and what not.
 
leghorn
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 11:14 pm

Everybody seems to want to play Game of Thrones at FL41 with my tax money.
 
oldJoe
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Re: Lufthansa: 10B EUR bailout - Update

Sat May 09, 2020 11:19 pm

majano wrote:
oldJoe wrote:
leghorn wrote:
No. it is not. The airports are critical infrastructure. If Lufthansa went out of the business those left standing would be all over their routes like a rash.
The thought process would be that if Lufthansa with their outrageous costs can make those routes work then we certainly can too.

Also if it were a critical piece of infrastructure then they shouldn't have been letting it acquire the routes of other airlines which have gone out of business. That is turning critical infrastructure in to hypercritical infrastructure.and painting yourself in to a corner.
It is time to take the old nag out behind the shed and put a bullet in her forehead.


Really an airport is the critical infrastructure ? If so than HHN ( as a example ) could be shot down ASAP ! I live in this area and pay my tax ( 40 years ) in the same area for the sake to keep this loss making place alive ? There are alot of this examples around Europe.
Can you imagine if Germany follow the way of the UK and get out of the EU ?
Your tiny island would be as much as importent like in China falls a sack of rice !
At the end of the day Lufthansa is a very important company in Germany , like it or not !

Important, yes. But critical?

Of course critical ! Tell me wich country of this world want to see their flag carrier to fail ? Think about the attached jobs which could be lost outside the airline.
 
zkeoj
Posts: 1220
Joined: Sun Feb 27, 2005 3:00 am

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 12:02 am

zkojq wrote:

leghorn wrote:
I do not agree that Lufthansa is critical infrastructure. The vacuum would be filled within a very short period of time.


How much emergency PPE has Ryanair, Easyjet and Norwegian brought to the Bundesrepublik?



Exactly. And how many Germans have those carriers repatriated from around the world? Ooops, apart from Norwegian they wouldn't even have the equipment to repatriate from New Zealand...
 
leghorn
Posts: 1287
Joined: Sun Jan 22, 2017 9:13 am

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 12:13 am

What is the urgent need to repatriate from New Zealand? Have the Orks been let loose?
People are jumping through hoops to justify the relevance of the carrier.
Once again if you promise Easyjet or Ryanair preferential access to the the market they'll happily pick up the tab for a few wet-leased retired A380s or 747s.
and it isn't as though Germany AG doesn't have its own supply of A340s to call upon.
 
blueflyer
Posts: 4338
Joined: Tue Jan 31, 2006 4:17 am

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 6:02 am

zkeoj wrote:
Exactly. And how many Germans have those carriers repatriated from around the world? Ooops, apart from Norwegian they wouldn't even have the equipment to repatriate from New Zealand...

And while Lufthansa was repatriating Germans and non-Germans from New Zealand, other German and non-German airlines repatriated Germans from other parts of the world. What's your point? That the German airline with the largest fleet did more repatriation flights than smaller airlines?
 
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Phosphorus
Posts: 912
Joined: Tue May 16, 2017 11:38 am

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 7:38 am

oldJoe wrote:
majano wrote:
oldJoe wrote:

Really an airport is the critical infrastructure ? If so than HHN ( as a example ) could be shot down ASAP ! I live in this area and pay my tax ( 40 years ) in the same area for the sake to keep this loss making place alive ? There are alot of this examples around Europe.
Can you imagine if Germany follow the way of the UK and get out of the EU ?
Your tiny island would be as much as importent like in China falls a sack of rice !
At the end of the day Lufthansa is a very important company in Germany , like it or not !

Important, yes. But critical?

Of course critical ! Tell me wich country of this world want to see their flag carrier to fail ? Think about the attached jobs which could be lost outside the airline.


Oh, really? Malev was forced to close down, despite being their country's flag carrier. Because state aid was in breach of the rules. Fair enough. But if state aid to LH is in breach of the rules, than it's only fair this state aid is denied. Would be unfortunate, but not more unfortunate than extinction of Malev.
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GLANKG
Posts: 53
Joined: Fri Feb 02, 2018 9:19 am

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 7:59 am

Phosphorus wrote:
oldJoe wrote:
majano wrote:
Important, yes. But critical?

Of course critical ! Tell me wich country of this world want to see their flag carrier to fail ? Think about the attached jobs which could be lost outside the airline.


Oh, really? Malev was forced to close down, despite being their country's flag carrier. Because state aid was in breach of the rules. Fair enough. But if state aid to LH is in breach of the rules, than it's only fair this state aid is denied. Would be unfortunate, but not more unfortunate than extinction of Malev.

The problem with LH bailout now is the terms of the bailout rather its legality. EC has clear guidance about legal state aid during Covid-19 and issued Temporary Framework, which applies to all businesses by the way, not only aviation.
 
Westerwaelder
Posts: 134
Joined: Fri Apr 03, 2020 12:27 pm

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 8:10 am

Phosphorus wrote:
oldJoe wrote:
majano wrote:
Important, yes. But critical?

Of course critical ! Tell me wich country of this world want to see their flag carrier to fail ? Think about the attached jobs which could be lost outside the airline.


Oh, really? Malev was forced to close down, despite being their country's flag carrier. Because state aid was in breach of the rules. Fair enough. But if state aid to LH is in breach of the rules, than it's only fair this state aid is denied. Would be unfortunate, but not more unfortunate than extinction of Malev.


We have had this countless times: the rules have changed in light of Covid 19. Without a change in rules, not many airlines (if any) will survive. Malev went under in times when others made money.
 
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calstanford
Posts: 53
Joined: Mon Dec 04, 2017 2:16 pm

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 8:16 am

zkeoj wrote:
zkojq wrote:

leghorn wrote:
I do not agree that Lufthansa is critical infrastructure. The vacuum would be filled within a very short period of time.


How much emergency PPE has Ryanair, Easyjet and Norwegian brought to the Bundesrepublik?



Exactly. And how many Germans have those carriers repatriated from around the world? Ooops, apart from Norwegian they wouldn't even have the equipment to repatriate from New Zealand...


Condor repatriated people from NZ too.
When you’re bitching, at least know what you’re talking about.

https://www.newshub.co.nz/home/travel/2 ... ation.html
 
RvA
Posts: 297
Joined: Tue Sep 15, 2015 12:37 pm

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 8:38 am

So everyone keeps talking about a bailout (interestingly we’re only having these discussions about LH and not AFKL, IB, AA, UA, DL etc.) for LH but can you then share the conditions of what was agreed? To my knowledge nothing has been agreed yet.

I maintain for Germany LH is critical infrastructure. No existing carrier(s) would fill in completely the void they leave behind. Sure, some may start domestic service, foreign carriers would increase their frequencies but no one will completely cover the jobs lost and revenues (incl. tax) generated in Germany. If UA took over all the transatlantic flying LH used to do this doesn’t help the jobs lost in Germany etc.
 
Blerg
Posts: 3600
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 8:41 am

RvA wrote:
So everyone keeps talking about a bailout (interestingly we’re only having these discussions about LH and not AFKL, IB, AA, UA, DL etc.) for LH but can you then share the conditions of what was agreed? To my knowledge nothing has been agreed yet.

I maintain for Germany LH is critical infrastructure. No existing carrier(s) would fill in completely the void they leave behind. Sure, some may start domestic service, foreign carriers would increase their frequencies but no one will completely cover the jobs lost and revenues (incl. tax) generated in Germany. If UA took over all the transatlantic flying LH used to do this doesn’t help the jobs lost in Germany etc.


We can also add airBaltic to that list as the other day the council of ministers approved €250 million in aid. Now all that is required is for EU's stamp of approval. That's quite a sum for an airline their size.
 
CFRPwingALbody
Posts: 351
Joined: Thu Oct 19, 2017 8:13 pm

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 8:47 am

AFAIK the state aid president was set in the US. The US airlines were the first to receive state support. I think support for the mayor airlines is justified. Global corporations require international connections to survive. The supported airlines need to maintain their international network even though low flight demand doesn't justify flights.
Lufthansa group needs to maintain decisions in Austria, Belgium and Switzerland besides their German main office for tax purposes. So for example Austrian airlines could become Lufthansa Austria, but they can't desolve the company. Maintaining the individual identity might be better.

I don't see rail as good option to replace intra European flights. The rail network is not intercompatible. The first step towards simular rail systems, implementation of ERTMS is being delayed constantly.
 
LJ
Posts: 5198
Joined: Wed Nov 17, 1999 8:28 pm

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 9:37 am

leghorn wrote:
No. it is not. The airports are critical infrastructure. If Lufthansa went out of the business those left standing would be all over their routes like a rash.
The thought process would be that if Lufthansa with their outrageous costs can make those routes work then we certainly can too..


I don't think German exporters agree with your view. How are they getting their goods to the destinations they need at the frequency they need and at the speed they need? Moreover, do you really believe Frankfurt will remain a finance capital once LH is gone? The French will be pleased though if LH would be gone.
 
leghorn
Posts: 1287
Joined: Sun Jan 22, 2017 9:13 am

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 9:52 am

RvA wrote:
No existing carrier(s) would fill in completely the void they leave behind. Sure, some may start domestic service, foreign carriers would increase their frequencies but no one will completely cover the jobs lost and revenues (incl. tax) generated in Germany. If UA took over all the transatlantic flying LH used to do this doesn’t help the jobs lost in Germany etc.

You can't make an Omlette without breaking eggs and you appear to have a misplaced need for Lufthansa to be ein Eierlegende Wollmilchsau. Reboot, Reset, never was there a better time.
Keeping these jobs in Germany appears to be only possible through illegal state aid or state aid that will be used illegally thereafter while the Government looks the other way.

This was a badly run company that didn't save for a rainy day. They kept paying out the dividends. Ryanair for example has history of not paying out dividends; the fortunes of the investors, M O'L included, rise and fall with the fortunes of the company. They did some modest share buybacks and once off dividend payments but this practice of paying out dividends through good and bad is something they've never done. The end result is that Ryanair have the means to weather the storm and Lufthansa don't.

I'd put it to you that Lufthansa are more so the unacceptable face of capitalism than the LCCs. Poorly run, inefficient and when the sh!t hits the fan they socialize loses while privatising profits.
 
leghorn
Posts: 1287
Joined: Sun Jan 22, 2017 9:13 am

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 9:58 am

LJ wrote:
leghorn wrote:
No. it is not. The airports are critical infrastructure. If Lufthansa went out of the business those left standing would be all over their routes like a rash.
The thought process would be that if Lufthansa with their outrageous costs can make those routes work then we certainly can too..


I don't think German exporters agree with your view. How are they getting their goods to the destinations they need at the frequency they need and at the speed they need? Moreover, do you really believe Frankfurt will remain a finance capital once LH is gone? The French will be pleased though if LH would be gone.

Last time I looked most freight was carried by Truck from Germany through Europe followed by Train and only high value, light product carried by air. As with passenger traffic, freight traffic will be served by those companies who have weathered the crisis.
As for business travellers willing to pay thousands for a seat. I find it hard to believe that the other airlines will pass up the opportunity to serve those profitable Customers. The competitors would be willing Lufthansa to fail so that they can displace them.
 
leghorn
Posts: 1287
Joined: Sun Jan 22, 2017 9:13 am

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 10:24 am

https://www.finanzen.net/nachricht/akti ... en-8850538
German text.

As mentioned before the Greens want 50% CO2 reductions which aren't possible and control of the board.
The SPD(Socialist Party in the Coalition) want all daughter companies in Tax Havens closed down and no dividends to be paid and no job losses.

I don't see how Spohr could recommend a deal to the existing shareholders to not only dilute their shareholding but hand control over to Government so that it becomes effectively a charitable organisation rather than a viable ongoing business.
 
RvA
Posts: 297
Joined: Tue Sep 15, 2015 12:37 pm

Re: Lufthansa: 10B EUR bailout - Update

Sun May 10, 2020 10:26 am

leghorn wrote:
RvA wrote:
No existing carrier(s) would fill in completely the void they leave behind. Sure, some may start domestic service, foreign carriers would increase their frequencies but no one will completely cover the jobs lost and revenues (incl. tax) generated in Germany. If UA took over all the transatlantic flying LH used to do this doesn’t help the jobs lost in Germany etc.

You can't make an Omlette without breaking eggs and you appear to have a misplaced need for Lufthansa to be ein Eierlegende Wollmilchsau. Reboot, Reset, never was there a better time.
Keeping these jobs in Germany appears to be only possible through illegal state aid or state aid that will be used illegally thereafter while the Government looks the other way.

This was a badly run company that didn't save for a rainy day. They kept paying out the dividends. Ryanair for example has history of not paying out dividends; the fortunes of the investors, M O'L included, rise and fall with the fortunes of the company. They did some modest share buybacks and once off dividend payments but this practice of paying out dividends through good and bad is something they've never done. The end result is that Ryanair have the means to weather the storm and Lufthansa don't.

I'd put it to you that Lufthansa are more so the unacceptable face of capitalism than the LCCs. Poorly run, inefficient and when the sh!t hits the fan they socialize loses while privatising profits.


Haha ok man. Sure thing you are right. Ryanair is the best ever and Lufthansa badly run, wasn’t profitable etc. Enjoy your bubble.

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