Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

  • 1
  • 2
  • 3
  • 4
  • 5
  • 11
 
B777LRF
Posts: 2702
Joined: Sun Nov 02, 2008 4:23 am

Re: Lufthansa: 10B EUR bailout - Update

Tue May 12, 2020 8:40 pm

No government should squander the public purse propping up companies without getting something in return.

I fully understand the position governments both in Germany, Austria and Belgium are assuming, not least because of the arrogance and greed displayed by the megalomaniac CEO of Lufthansa. If he doesn't want to accept the terms, I think the most likely outcome is that the board will fire his pathetic posterior and get someone more suitable, and politically tuned-in, to take the reins. If not, I fully expect the Austrian and Belgian governments to nationalise OS and SN post the inevitable bankruptcy, and float it to private owners once the Wuhan virus crises is over.

As for Lufthansa, it's up to the German government to decide how important they are for Germany. But they shouldn't, and hopefully won't, cave in to the idiotic demands set by it's delusional CEO. Either let it fold and pick up the pieces, or insist any subsidies are contigent on the immediate departure of Spohr. I'm leaning, maybe more out of hope than rationality, they'll go for the latter option.
Signature. You just read one.
 
User avatar
adambrau
Posts: 334
Joined: Sun Mar 25, 2007 11:44 pm

Re: Lufthansa: 10B EUR bailout - Update

Tue May 12, 2020 8:48 pm

GLANKG wrote:
https://www.ft.com/content/a58fdfe9-a4b8-477c-be9b-5b2090f41fed

“For years the airline industry was supreme and resisted calls to reduce emissions. Now they are coming cap in hand to ask for help and we can’t waste this chance,” said a senior EU official. Unlike other industries such as cars — where Brussels has wielded its regulatory clout with tough emissions targets — the EU has limited tools to get aviation to bow to green targets. At most, airlines are subject to the EU’s emissions trading scheme, which sets a market price on carbon for polluters.

With governments now forking out billions in bailouts, political pressure for a kerosene tax is also growing. Before the crisis hit, the likes of Frans Timmermans, commissioner in charge of the green deal, came out in favour of a kerosene tax that would specifically target airline emissions. Brussels is planning a review of its sensitive energy taxation directive next year in the hope that it could pave the way for an EU-wide airline levy.

Surely it's not unreasonable when governments move to prop up grounded carriers, thoughts turned to what taxpayers should demand in return.
P.S. it is about gradual and measured change towards less emission, not revolutionary slaughter of all short haul flying at once, it's not easy and it requires the whole EU to act together to avoid some countries cutting corners. But we have to start somewhere, today 60% of DB operations run on green energy and it expects to be 100% by 2038.


Agree with you 100%. A little stimulus from the government deserves a little action on the airlines finally have green targets to meet.
JFK Friendly
 
LJ
Posts: 5334
Joined: Wed Nov 17, 1999 8:28 pm

Re: Lufthansa: 10B EUR bailout - Update

Tue May 12, 2020 8:52 pm

Blerg wrote:
I understand all that and that's perfectly reasonable, I am just surprised that Germany is being so difficult (well, mostly SPD) when they profit the most from LH Group's success. I guess in the end it will all turn out ok but still, quite odd. We will have to wait and see how much longer Austrians and Belgians keep this up.


AFAIK the SPD is not on good terms with its coalition partner the CDU/CSU. As such it probably needs to profile itself in this case. Moreover, as it's not unlikely the coalotion will break up soon and thus elections are coming.
 
bralo20
Posts: 501
Joined: Sun May 25, 2008 9:05 pm

Re: Lufthansa: 10B EUR bailout - Update

Tue May 12, 2020 9:06 pm

cityshuttle wrote:
Makes me think of those negotiations with OS & SN [and their respective governments] are in favour of Carsten Spohr ... maybe the strategy is to not (!) get state aid from Austria & Belgium and then send both airlines to insolvency court, transferring the slots to EW and continue with less costs at VIE and BRU ...


If SN goes into bankrupt, the chances are pretty high at the moment that our government will nationalise the airline (and that's maybe why they are playing hardball), why pay 3 or 400 million for something that you might be able to pick up for cents on the dollar? Anyway, seems that our current government has learned from the mistakes the previous one(s) made when they sold SN to LH without guarantees.
 
bralo20
Posts: 501
Joined: Sun May 25, 2008 9:05 pm

Re: Lufthansa: 10B EUR bailout - Update

Tue May 12, 2020 9:09 pm

LJ wrote:
Blerg wrote:
But could the Belgian government do much with 25%? Or did they ask for blocking rights like SPD wants in Germany? For me what's extremely interesting is that most other major airlines got aid without problem while LH is facing major problems even in its home market. Really interesting situation.


You cannot do not much with 25% but you do get a seat on the Board. As for AF/KL and IB, they probably have good contacts. Lufthansa has the problem that is has to deal with the German Austrian and Belgian governments, all just woke up and realised that they sold (or in case of Germany let it buy) their airline years ago without taking the necessary steps to safeguard its interests. The Dutch and French government both have a stake in AF/KL, thus no incentive for them to demand influence (they already have the direct contact with the AF/KL CEO). Moreover, they have a financial interest to approve a package. The same in Italy. Spain really needs IAG and thus agreed quickly. The UK is in a difficult position as aid for IAG will mean it have to give it to Virgin and easyJet as well. Norway has enough money and need air travel. As such saving the Norwegian part of Norwegian makes sense (and it's a way of rationalising that airline).


Apparently our (Belgian) government demanded 25% of the shares and veto rights.
 
RvA
Posts: 380
Joined: Tue Sep 15, 2015 12:37 pm

Re: Lufthansa: 10B EUR bailout - Update

Tue May 12, 2020 9:18 pm

LHG can also restructure SN in a way that many more jobs get lost. If the government thinks SN can survive on its own as a nationalised airline and not cost them a fortune to eventually sell it off cheap anyway they’re mistaken. AMS up north, LHR to the west, FRA/DUS to the east and CDG to the south. Literally the worst place to try and compete with any of them unless you’re very close with one of them. If LH has to let them go I cannot imagine AFKL or IAG would want a part of it, they’d all 3 of them just kill SN and be done with it.
 
oldJoe
Posts: 187
Joined: Fri Jan 10, 2020 11:04 pm

Re: Lufthansa: 10B EUR bailout - Update

Tue May 12, 2020 9:36 pm

RvA wrote:
LHG can also restructure SN in a way that many more jobs get lost. If the government thinks SN can survive on its own as a nationalised airline and not cost them a fortune to eventually sell it off cheap anyway they’re mistaken. AMS up north, LHR to the west, FRA/DUS to the east and CDG to the south. Literally the worst place to try and compete with any of them unless you’re very close with one of them. If LH has to let them go I cannot imagine AFKL or IAG would want a part of it, they’d all 3 of them just kill SN and be done with it.


Excactly !!
Let`s not forget that SN burned cash for failed Korongo Airlines , wetleasing 7 SSJ 100 and so on ....
Why DHL brought the planes to Leipzig ? If the Belgium government want to play hardball could easy be a shoot in their own food.
LH could fly all aircraft out of Brussels tomorrow and good luck to the government in COVID-19 times to make them profitable again.
 
Boavida
Posts: 9
Joined: Tue Jul 16, 2019 12:54 pm

Re: Lufthansa: 10B EUR bailout - Update

Tue May 12, 2020 9:57 pm

Play hardball? If a government spends millions of taxpayers(!) money, isn't it logical they ask something in return?
 
behramjee
Posts: 5081
Joined: Sat Aug 02, 2003 4:56 am

Re: Lufthansa: 10B EUR bailout - Update

Tue May 12, 2020 9:59 pm

Boavida wrote:
SN has just announced it will be cutting:

- 1000 jobs
- 10 planes (2 long haul and 8 short haul)
- 22 destinations

They want to grow again as from 2023.

In the meantime it's still waiting for a bailout deal between the Belgian government and LH Group. The government is willing to spend millions, but wants some guarantees from LH in return. They haven't forgotten the fact that LH wanted to basically terminate SN and turn it into a LCC (Eurowings) not so long ago... LH looks reluctant to give these guarantees.


Any idea which A330 routes of SN are going to be suspended as a result of the 2 A330s being phased out please?
 
oldJoe
Posts: 187
Joined: Fri Jan 10, 2020 11:04 pm

Re: Lufthansa: 10B EUR bailout - Update

Tue May 12, 2020 10:08 pm

Boavida wrote:
Play hardball? If a government spends millions of taxpayers(!) money, isn't it logical they ask something in return?


What they got in the last years in return ? Nothing ? All jobs wich were secured is nothing ?
If the Belgium government didn`t sell SN how much money would be burned and tell me what they would get in return ? Nothing !
 
Kilopond
Posts: 561
Joined: Wed Jun 15, 2016 10:08 am

Re: Lufthansa: 10B EUR bailout - Update

Tue May 12, 2020 10:21 pm

bralo20 wrote:
[...]If SN goes into bankrupt [...] why pay 3 or 400 million for something that you might be able to pick up for cents on the dollar?[...]


There won‘t be any uncontrolled collapse of any LHG subsidary because in this case the management could be jailed for delaying filing for insolvency ([de] Insolvenzverschleppung). By German law this is considered a crime and offenders do get punished every now and then.

So with every day ending without negotiation results it becomes more likely that the whole Lufthansa Group will enter an orderly Chapter-11 style bankruptcy process. (Not my own crazy idea at all! When CEO Spohr first came up with this proposal, media suggested he was just bluffing in order to put pressure on the respective governments).
 
blueflyer
Posts: 4352
Joined: Tue Jan 31, 2006 4:17 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 12:03 am

RvA wrote:
LHG can also restructure SN in a way that many more jobs get lost. If the government thinks SN can survive on its own as a nationalised airline and not cost them a fortune to eventually sell it off cheap anyway they’re mistaken. AMS up north, LHR to the west, FRA/DUS to the east and CDG to the south. Literally the worst place to try and compete with any of them unless you’re very close with one of them. If LH has to let them go I cannot imagine AFKL or IAG would want a part of it, they’d all 3 of them just kill SN and be done with it.

For one, Lufthansa isn't going to let go of Brussels Airlines quite easily. It is its 7th largest market and acts as a buffer against Air France and KLM. Management can read a map as well as you and I. If Brussels Airlines collapses, Lufthansa can schedule half-hourly shuttles to connect with its long-haul network in FRA, and capture only a silver of the market as it will take just as much time for many passengers to drive or ride the train to AMS or CDG and catch a non-stop flight.

For another, if the Belgian government can nationalize most of the airline and do a decent job of running it for a couple of years (I know…), and if traffic returns to 2018-2019 levels by then as expected, it wouldn’t be too hard to get British Airways’ attention, if only to counter the third London hub (aka AMS), though Brexit may be a factor (but I doubt it because Spain will raise holly hell rather than accept Brexit terms leading to the breakup of IAG). Or maybe even Lufthansa’s, to keep British Airways out of its backyard. I wouldn’t go as far as saying the government would see a return on its investment, though even that is a possibility if you include unemployment benefits and loss of economic growth that would result from a collapse of Brussels Airlines.

I do think the Belgian government’s hand is stronger than many give it credit for. The threat of an imminent collapse due to a lack of cash does not mean what it normally would under this very unique environment. Save for the occasional repatriation or cargo-only flight, the fleet is already grounded, and passengers and staff are not going to be stranded overseas. The government can afford to cover salaries for a few weeks under its temporary unemployment scheme and use the threat of nationalization to get Lufthansa to admit that money doesn’t come for nothing, notwithstanding Mark Knopfler’s claims to the contrary.

behramjee wrote:
Any idea which A330 routes of SN are going to be suspended as a result of the 2 A330s being phased out please?

Management stated two long-haul destinations will be cut. My guess is it will be IAD and YUL. Since the A330 fleet had reasonably high utilization, only destinations with (near) daily frequencies and marginal profitability are candidates, and that's the transatlantic network by another name.

JFK is marginally profitable in the best of times, however management has, so far, refused to drop it out of fear that connecting passengers from Africa would not know the NYC area well enough to accept EWR as an alternative and would book with a competitor instead. Forward bookings for YUL are said to be disappointing. IAD is the best of the three, however it is also not meeting expectations, and with the anticipated drop in traffic, United could probably leave a 777 on the route and meet the demand.
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 5:10 am

bralo20 wrote:
cityshuttle wrote:
Makes me think of those negotiations with OS & SN [and their respective governments] are in favour of Carsten Spohr ... maybe the strategy is to not (!) get state aid from Austria & Belgium and then send both airlines to insolvency court, transferring the slots to EW and continue with less costs at VIE and BRU ...


If SN goes into bankrupt, the chances are pretty high at the moment that our government will nationalise the airline (and that's maybe why they are playing hardball), why pay 3 or 400 million for something that you might be able to pick up for cents on the dollar? Anyway, seems that our current government has learned from the mistakes the previous one(s) made when they sold SN to LH without guarantees.


If SN does go bankrupt and the government nationalizes it, does it mean LH is out for good? They are taking over their shares in the company? Do we know how much longer SN can last without receiving government aid?
 
Westerwaelder
Posts: 240
Joined: Fri Apr 03, 2020 12:27 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 6:35 am

RvA wrote:
Westerwaelder wrote:
RvA wrote:

Yes and KLM for example flies to airports including within Germany that are less than 4 hours by train too.

Does the 4 hours include delay time? I’ve never had an on time train in Germany maybe that can shave off some time. :)

In seriousness though this actually would inconvenience a lot of people. Not everyone lives in the city centre of Dusseldorf for example and it may work out much better to carpool to DUS and park there instead and then fly out.


Rail & Fly is already a proven concept. There will always be people better off and some worse off if you move the departure location (from station to airport or vice versa). That is not an argument. If this becomes a Europe wide initiative than it's a good thing. Something in aviation will have to give if we are to get climate change under control. And not just a 50% eduction by 2050 or similar vague promises. The challenge will be to provide capacity on the rail network.


Rail & Fly is not a proven concept. It exists yes, is it optimal? No. Is it capable to fully replace flights over short distances? No. A big part of the problem is the reliability of Deutsche Bahn and just how well connected and punctual it is. Also what will be very important to do this right is the connectivity in systems to work together. That barely exists today and is enormously clunky with rail and fly. 9B segments that are flat rate etc. is not fit for purpose especially if it’s meant to be a replacement for flights.


Could you please provide a source for reliability of Deutsche Bahn being a problem for Rail & Fly?

Connectivity barely exists today? It certainly does for FRA and LH and DB have cooperated on schedules for years. If they are now "encouraged" this should not be a hurdle that can't be overcome.
 
Westerwaelder
Posts: 240
Joined: Fri Apr 03, 2020 12:27 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 6:39 am

adambrau wrote:
GLANKG wrote:
https://www.ft.com/content/a58fdfe9-a4b8-477c-be9b-5b2090f41fed

“For years the airline industry was supreme and resisted calls to reduce emissions. Now they are coming cap in hand to ask for help and we can’t waste this chance,” said a senior EU official. Unlike other industries such as cars — where Brussels has wielded its regulatory clout with tough emissions targets — the EU has limited tools to get aviation to bow to green targets. At most, airlines are subject to the EU’s emissions trading scheme, which sets a market price on carbon for polluters.

With governments now forking out billions in bailouts, political pressure for a kerosene tax is also growing. Before the crisis hit, the likes of Frans Timmermans, commissioner in charge of the green deal, came out in favour of a kerosene tax that would specifically target airline emissions. Brussels is planning a review of its sensitive energy taxation directive next year in the hope that it could pave the way for an EU-wide airline levy.

Surely it's not unreasonable when governments move to prop up grounded carriers, thoughts turned to what taxpayers should demand in return.
P.S. it is about gradual and measured change towards less emission, not revolutionary slaughter of all short haul flying at once, it's not easy and it requires the whole EU to act together to avoid some countries cutting corners. But we have to start somewhere, today 60% of DB operations run on green energy and it expects to be 100% by 2038.


Agree with you 100%. A little stimulus from the government deserves a little action on the airlines finally have green targets to meet.


Anything else would be a missed opportunity
 
bralo20
Posts: 501
Joined: Sun May 25, 2008 9:05 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 6:55 am

Blerg wrote:
bralo20 wrote:
If SN does go bankrupt and the government nationalizes it, does it mean LH is out for good? They are taking over their shares in the company? Do we know how much longer SN can last without receiving government aid?


LH would be out indeed if SN goes bankrupt. Not sure how it will go exactly, it hasn't been done in a while, think the latest nationalisation of a company was during the banking crisis and that particular bank is doing quite well these days.

According to the info given, SN can last until the end of May (but I think they might be able to stretch that a little). Anyway, Carsten Spohr is coming to meet our government on Friday so there might be news before the weekend if everything goes OK but since both Spohr and our government are playing hardball I doubt there will be a solution. Think the fact that our government wasn't notified about the restructuring (while being in negotiations for funds) pissed them off quite a bit (which was noticeable when our deputy prime minister said on tv that LH shouldn't ask for funds if they don't want the government involved.

Time will tell how things will go.
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 6:57 am

Seems like Lufthansa and the German government might reach an agreement by the end of this week. Opposition within the government seems to have calmed down thus paving the way towards a final solution for the struggling airline. Article doesn't mention anything about CO2 emissions or cutting short flights so it seems those demands might have been dropped in the process.

Lufthansa has around €4 billion in cash remaining.

Source: https://www.bnnbloomberg.ca/lufthansa-n ... -1.1435063
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 6:59 am

bralo20 wrote:
Blerg wrote:
bralo20 wrote:
If SN does go bankrupt and the government nationalizes it, does it mean LH is out for good? They are taking over their shares in the company? Do we know how much longer SN can last without receiving government aid?


LH would be out indeed if SN goes bankrupt. Not sure how it will go exactly, it hasn't been done in a while, think the latest nationalisation of a company was during the banking crisis and that particular bank is doing quite well these days.

According to the info given, SN can last until the end of May (but I think they might be able to stretch that a little). Anyway, Carsten Spohr is coming to meet our government on Friday so there might be news before the weekend if everything goes OK but since both Spohr and our government are playing hardball I doubt there will be a solution. Think the fact that our government wasn't notified about the restructuring (while being in negotiations for funds) pissed them off quite a bit (which was noticeable when our deputy prime minister said on tv that LH shouldn't ask for funds if they don't want the government involved.

Time will tell how things will go.


Interesting, thank you. Please keep us updated on how things progress in Belgium. Do we know what guarantees the Belgian government is asking for? I suppose they want the SN brand to stay but have they actually come forward officially with some requests and conditions?
 
RvA
Posts: 380
Joined: Tue Sep 15, 2015 12:37 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 7:39 am

Westerwaelder wrote:
RvA wrote:
Westerwaelder wrote:

Rail & Fly is already a proven concept. There will always be people better off and some worse off if you move the departure location (from station to airport or vice versa). That is not an argument. If this becomes a Europe wide initiative than it's a good thing. Something in aviation will have to give if we are to get climate change under control. And not just a 50% eduction by 2050 or similar vague promises. The challenge will be to provide capacity on the rail network.


Rail & Fly is not a proven concept. It exists yes, is it optimal? No. Is it capable to fully replace flights over short distances? No. A big part of the problem is the reliability of Deutsche Bahn and just how well connected and punctual it is. Also what will be very important to do this right is the connectivity in systems to work together. That barely exists today and is enormously clunky with rail and fly. 9B segments that are flat rate etc. is not fit for purpose especially if it’s meant to be a replacement for flights.


Could you please provide a source for reliability of Deutsche Bahn being a problem for Rail & Fly?

Connectivity barely exists today? It certainly does for FRA and LH and DB have cooperated on schedules for years. If they are now "encouraged" this should not be a hurdle that can't be overcome.


Plenty of personal experience and hearing the same from colleagues and family. Delays upon delays every frigging time. Not what you want when you are trying to connect to a flight.

And connectivity wise it is hugely suboptimal. Flat rate fares, not possible to upset or even properly cross sell. Use of a pseudo airline code to make it work is great if it’s 2004, but for 2020 that’s not where it should be and not where the industry is headed. But it will take years to get there.
 
bralo20
Posts: 501
Joined: Sun May 25, 2008 9:05 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 7:43 am

Blerg wrote:

Interesting, thank you. Please keep us updated on how things progress in Belgium. Do we know what guarantees the Belgian government is asking for? I suppose they want the SN brand to stay but have they actually come forward officially with some requests and conditions?


Not sure about the guarantees, there are plenty of rumours floating around but seems that the government is keeping their cards close to their vest. Several scenario's are on the table apparently, the brand isn't up for discussion, LH saw that the SN brand was stronger than the EW brand and abandoned the EW strategy last year and even the restructuring plan presented yesterday sees SN turning more into a full service carrier like LH and LX with focus on business traffic and less on leisure traffic. The government wants to be sure that LH isn't going to get the money from SN to Germany, they want to be sure that LH invests in SN in the future and that they keep BRU as a hub, etc... They don't want to see that LH just sucks SN dry and keeps stripping it like they did in the past.

They might have learned from the Thomas Cook bankruptcy, in the months/weeks/days before the bankruptcy of the group, the head office transferred hundreds of millions from the Belgian companies (all Belgian TC companies were quite profitable) to the British company to keep that afloat.
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 10:37 am

bralo20 wrote:
Blerg wrote:

Interesting, thank you. Please keep us updated on how things progress in Belgium. Do we know what guarantees the Belgian government is asking for? I suppose they want the SN brand to stay but have they actually come forward officially with some requests and conditions?


Not sure about the guarantees, there are plenty of rumours floating around but seems that the government is keeping their cards close to their vest. Several scenario's are on the table apparently, the brand isn't up for discussion, LH saw that the SN brand was stronger than the EW brand and abandoned the EW strategy last year and even the restructuring plan presented yesterday sees SN turning more into a full service carrier like LH and LX with focus on business traffic and less on leisure traffic. The government wants to be sure that LH isn't going to get the money from SN to Germany, they want to be sure that LH invests in SN in the future and that they keep BRU as a hub, etc... They don't want to see that LH just sucks SN dry and keeps stripping it like they did in the past.

They might have learned from the Thomas Cook bankruptcy, in the months/weeks/days before the bankruptcy of the group, the head office transferred hundreds of millions from the Belgian companies (all Belgian TC companies were quite profitable) to the British company to keep that afloat.


What is SN's actual role, not only within LH Group, but in wider European aviation terms? Ok, they have an African network but so do Air France and British Airways and they probably offer same connections as SN. So what is making SN stand out from their competition, what is their selling point? For me that's the most interesting and important part about a certain business. It's as if SN as a brand is a bit lost.
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 10:39 am

Greens are back. Now they are requesting for more information on LH's dealing with companies that are located in tax havens. With SPD not entirely convinced and the Greens placing additional hurdles, do CDU/CSU have enough political weight to get this aid through fast? Can Greens alone block this aid?

https://www.airliners.de/den-gruenen-lu ... iste/55374
 
RvA
Posts: 380
Joined: Tue Sep 15, 2015 12:37 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 11:07 am

It’s not being made easy but it’ll get there in the end. Unless I’m wrong, LHG is probably in a situation where something major is in the cards that the shareholders need to vote. They then have to call a vote and give lead time etc. This could take a while I think that’s also why this looks like it’s not moving. Not sure about what I just said, just a thought.
 
User avatar
eta unknown
Posts: 2835
Joined: Wed Jun 13, 2001 5:03 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 11:23 am

Blerg wrote:
What is SN's actual role, not only within LH Group, but in wider European aviation terms? Ok, they have an African network but so do Air France and British Airways and they probably offer same connections as SN. So what is making SN stand out from their competition, what is their selling point? For me that's the most interesting and important part about a certain business. It's as if SN as a brand is a bit lost.


SN is really just about Africa- more destinations served than most European competitors and a defacto policy of "last out, first in" in the days of numerous coups/civil wars and other regional political instabilities.
 
bralo20
Posts: 501
Joined: Sun May 25, 2008 9:05 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 12:05 pm

eta unknown wrote:
Blerg wrote:
What is SN's actual role, not only within LH Group, but in wider European aviation terms? Ok, they have an African network but so do Air France and British Airways and they probably offer same connections as SN. So what is making SN stand out from their competition, what is their selling point? For me that's the most interesting and important part about a certain business. It's as if SN as a brand is a bit lost.


SN is really just about Africa- more destinations served than most European competitors and a defacto policy of "last out, first in" in the days of numerous coups/civil wars and other regional political instabilities.


I agree with that, the strength of SN is Africa and not only during times of political instabilities they operated "last out, first in" but they also did that during the severe Ebola outbreak a few years back. While every other airline abandoned countries like the Congo for example, SN kept on flying (and at one point was the sole international airline flying) and not only provided a strong life line for the citizens but also for the medical personnel operating in the country and the necessary supplies to do so, even though Congo fucked SN over a couple of times (Korongo Airlines for example, loss of traffic rights, etc...). SN (as in Brussels Airlines) still can bow on the expertise and the relations of the late SN (as in Sabena) and they are quitte high regarded. Lufthansa doesn't have the connection with the African countries that SN has and it seems that people in Africa just don't want to fly via FRA, MUC or other airports in Germany.

In that way, SN is quite the unique airline. Certainly not because of their few TATL routes and their Europe network, that's average at best.
 
Westerwaelder
Posts: 240
Joined: Fri Apr 03, 2020 12:27 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 12:39 pm

RvA wrote:
Westerwaelder wrote:
RvA wrote:

Rail & Fly is not a proven concept. It exists yes, is it optimal? No. Is it capable to fully replace flights over short distances? No. A big part of the problem is the reliability of Deutsche Bahn and just how well connected and punctual it is. Also what will be very important to do this right is the connectivity in systems to work together. That barely exists today and is enormously clunky with rail and fly. 9B segments that are flat rate etc. is not fit for purpose especially if it’s meant to be a replacement for flights.


Could you please provide a source for reliability of Deutsche Bahn being a problem for Rail & Fly?

Connectivity barely exists today? It certainly does for FRA and LH and DB have cooperated on schedules for years. If they are now "encouraged" this should not be a hurdle that can't be overcome.


Plenty of personal experience and hearing the same from colleagues and family. Delays upon delays every frigging time. Not what you want when you are trying to connect to a flight.

And connectivity wise it is hugely suboptimal. Flat rate fares, not possible to upset or even properly cross sell. Use of a pseudo airline code to make it work is great if it’s 2004, but for 2020 that’s not where it should be and not where the industry is headed. But it will take years to get there.


So why is government pressure to make this viable such a bad thing? Plenty of room for improvement in your experience and nothing like some pressure from the government to get the job done.
 
RvA
Posts: 380
Joined: Tue Sep 15, 2015 12:37 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 1:12 pm

Westerwaelder wrote:
RvA wrote:
Westerwaelder wrote:

Could you please provide a source for reliability of Deutsche Bahn being a problem for Rail & Fly?

Connectivity barely exists today? It certainly does for FRA and LH and DB have cooperated on schedules for years. If they are now "encouraged" this should not be a hurdle that can't be overcome.


Plenty of personal experience and hearing the same from colleagues and family. Delays upon delays every frigging time. Not what you want when you are trying to connect to a flight.

And connectivity wise it is hugely suboptimal. Flat rate fares, not possible to upset or even properly cross sell. Use of a pseudo airline code to make it work is great if it’s 2004, but for 2020 that’s not where it should be and not where the industry is headed. But it will take years to get there.


So why is government pressure to make this viable such a bad thing? Plenty of room for improvement in your experience and nothing like some pressure from the government to get the job done.


Because it’s being rushed. That improvement will take years while meantime a big chunk of competitiveness is lost all for a measure that will yield little if any results. DUS-FRA just shifts to MUC instead where there will be more flying likely or to other European cities. All because of something that looks good on paper but is far from a properly effective measure. Meanwhile shipping continues to pollute more with less scrutiny.

You have to start somewhere but doing it in a crisis time to try and score some kudos points with your following while actually not creating much effect, just hassle for most people, seems futile to me, personally.
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 1:38 pm

Westerwaelder wrote:
RvA wrote:
Westerwaelder wrote:

Could you please provide a source for reliability of Deutsche Bahn being a problem for Rail & Fly?

Connectivity barely exists today? It certainly does for FRA and LH and DB have cooperated on schedules for years. If they are now "encouraged" this should not be a hurdle that can't be overcome.


Plenty of personal experience and hearing the same from colleagues and family. Delays upon delays every frigging time. Not what you want when you are trying to connect to a flight.

And connectivity wise it is hugely suboptimal. Flat rate fares, not possible to upset or even properly cross sell. Use of a pseudo airline code to make it work is great if it’s 2004, but for 2020 that’s not where it should be and not where the industry is headed. But it will take years to get there.


So why is government pressure to make this viable such a bad thing? Plenty of room for improvement in your experience and nothing like some pressure from the government to get the job done.


Just because a government wants to push something through doesn't mean it's necessarily a good thing. Politicians are very often pressured into doing something which does not have to make sense. Like I already wrote before, this will impact Lufthansa's competitiveness long-term and might actually make their position in these markets worse. Imagine if they have to cut some domestic flights, international passengers (Middle East, rest of Asia, parts of Europe...) will switch to airlines that can fly them in to their final destination in stead of LH which will force them to ride the train.
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 1:41 pm

bralo20 wrote:
eta unknown wrote:
Blerg wrote:
What is SN's actual role, not only within LH Group, but in wider European aviation terms? Ok, they have an African network but so do Air France and British Airways and they probably offer same connections as SN. So what is making SN stand out from their competition, what is their selling point? For me that's the most interesting and important part about a certain business. It's as if SN as a brand is a bit lost.


SN is really just about Africa- more destinations served than most European competitors and a defacto policy of "last out, first in" in the days of numerous coups/civil wars and other regional political instabilities.


I agree with that, the strength of SN is Africa and not only during times of political instabilities they operated "last out, first in" but they also did that during the severe Ebola outbreak a few years back. While every other airline abandoned countries like the Congo for example, SN kept on flying (and at one point was the sole international airline flying) and not only provided a strong life line for the citizens but also for the medical personnel operating in the country and the necessary supplies to do so, even though Congo fucked SN over a couple of times (Korongo Airlines for example, loss of traffic rights, etc...). SN (as in Brussels Airlines) still can bow on the expertise and the relations of the late SN (as in Sabena) and they are quitte high regarded. Lufthansa doesn't have the connection with the African countries that SN has and it seems that people in Africa just don't want to fly via FRA, MUC or other airports in Germany.

In that way, SN is quite the unique airline. Certainly not because of their few TATL routes and their Europe network, that's average at best.


Makes you wonder how much longer SN will remain competitive in Africa. In recent years we have seen several airlines expand in this market and they have been targeting transfers from Asia, North America and Europe. Some of these airlines are Turkish Airlines, Egyptair, RAM, Ethiopian and more recently Air Senegal.
 
max999
Posts: 1219
Joined: Fri Dec 09, 2005 11:05 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 1:49 pm

Blerg wrote:
Greens are back. Now they are requesting for more information on LH's dealing with companies that are located in tax havens. With SPD not entirely convinced and the Greens placing additional hurdles, do CDU/CSU have enough political weight to get this aid through fast? Can Greens alone block this aid?

https://www.airliners.de/den-gruenen-lu ... iste/55374


I have a friend from Bayern (Bavaria) who hated how the big German companies were always in bed with the state and federal governments. He complained the companies often got what they wanted while screwing the voters and taxpayers. This LH bailout is just another classic example a big company trying to milk the government with no strings attached.

That's why he has voted Green even before they became popular. And I think more Germans should be voting Green to protect themselves from being ripped off by the big corporates in their country.
All the things I really like to do are either immoral, illegal, or fattening.
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 2:10 pm

max999 wrote:
Blerg wrote:
Greens are back. Now they are requesting for more information on LH's dealing with companies that are located in tax havens. With SPD not entirely convinced and the Greens placing additional hurdles, do CDU/CSU have enough political weight to get this aid through fast? Can Greens alone block this aid?

https://www.airliners.de/den-gruenen-lu ... iste/55374


I have a friend from Bayern (Bavaria) who hated how the big German companies were always in bed with the state and federal governments. He complained the companies often got what they wanted while screwing the voters and taxpayers. This LH bailout is just another classic example a big company trying to milk the government with no strings attached.

That's why he has voted Green even before they became popular. And I think more Germans should be voting Green to protect themselves from being ripped off by the big corporates in their country.


And what will happen once Greens get to power? Nothing. They will realize that they need these multinational companies to fill their coffers and to keep the German economy running. It's easy for them to be the angry, righteous opposition party but once you assume power you also get a reality check. What would happen if Lufthansa scaled down its Munich hub in favor of Vienna? How many jobs would be lost, not to mention income from taxes.
 
fraT
Posts: 1174
Joined: Wed Oct 01, 2003 4:32 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 2:36 pm

max999 wrote:
Blerg wrote:
Greens are back. Now they are requesting for more information on LH's dealing with companies that are located in tax havens. With SPD not entirely convinced and the Greens placing additional hurdles, do CDU/CSU have enough political weight to get this aid through fast? Can Greens alone block this aid?

https://www.airliners.de/den-gruenen-lu ... iste/55374


I have a friend from Bayern (Bavaria) who hated how the big German companies were always in bed with the state and federal governments. He complained the companies often got what they wanted while screwing the voters and taxpayers. This LH bailout is just another classic example a big company trying to milk the government with no strings attached.

That's why he has voted Green even before they became popular. And I think more Germans should be voting Green to protect themselves from being ripped off by the big corporates in their country.


Reality seems to prove the opposite. The Green party has lost between 5 to 8 percentage points in polls since the Corona crisis started.
A lot of people are realizing that their top shots are great talking about things with effectiveness in 10, 20 or 30 years. But when it comes to fighting the pandemic or supporting the economy now, there is not much coming from them.
So I am glad that they did not become part of the federal government. Some folks from the Social Democrats are also strongly opposing big companies and also the aviation industry but my guess is that it will be easier to find an agreement with them.
 
Westerwaelder
Posts: 240
Joined: Fri Apr 03, 2020 12:27 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 2:43 pm

Blerg wrote:
max999 wrote:
Blerg wrote:
Greens are back. Now they are requesting for more information on LH's dealing with companies that are located in tax havens. With SPD not entirely convinced and the Greens placing additional hurdles, do CDU/CSU have enough political weight to get this aid through fast? Can Greens alone block this aid?

https://www.airliners.de/den-gruenen-lu ... iste/55374


I have a friend from Bayern (Bavaria) who hated how the big German companies were always in bed with the state and federal governments. He complained the companies often got what they wanted while screwing the voters and taxpayers. This LH bailout is just another classic example a big company trying to milk the government with no strings attached.

That's why he has voted Green even before they became popular. And I think more Germans should be voting Green to protect themselves from being ripped off by the big corporates in their country.


And what will happen once Greens get to power? Nothing. They will realize that they need these multinational companies to fill their coffers and to keep the German economy running. It's easy for them to be the angry, righteous opposition party but once you assume power you also get a reality check. What would happen if Lufthansa scaled down its Munich hub in favor of Vienna? How many jobs would be lost, not to mention income from taxes.


This is not an all or nothing as you make it out to be. Look up what the German green party has achieved while in power. They are more pragmatic than you give them credit for
 
Westerwaelder
Posts: 240
Joined: Fri Apr 03, 2020 12:27 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 2:51 pm

Blerg wrote:
Westerwaelder wrote:
RvA wrote:

Plenty of personal experience and hearing the same from colleagues and family. Delays upon delays every frigging time. Not what you want when you are trying to connect to a flight.

And connectivity wise it is hugely suboptimal. Flat rate fares, not possible to upset or even properly cross sell. Use of a pseudo airline code to make it work is great if it’s 2004, but for 2020 that’s not where it should be and not where the industry is headed. But it will take years to get there.


So why is government pressure to make this viable such a bad thing? Plenty of room for improvement in your experience and nothing like some pressure from the government to get the job done.


Just because a government wants to push something through doesn't mean it's necessarily a good thing. Politicians are very often pressured into doing something which does not have to make sense. Like I already wrote before, this will impact Lufthansa's competitiveness long-term and might actually make their position in these markets worse. Imagine if they have to cut some domestic flights, international passengers (Middle East, rest of Asia, parts of Europe...) will switch to airlines that can fly them in to their final destination in stead of LH which will force them to ride the train.


I don't understand your point? It's not a good idea because the goverment wants it and it's not in any way in need of validation by the government either. It is the right thing to do if you want to reduce CO2 emissions. But the government has means to make it happen by applying pressure. That's were they come in.

As for competitiveness: for decades we saw very little progress in the auto industry because they shouted it would "limit their competitiveness" (see the conversation about speed limits) and risked jobs. It's the typical dead-stop argument against progress. What's the alternative? We all sit around and wait for others to take the first step? Happy waiting
 
RvA
Posts: 380
Joined: Tue Sep 15, 2015 12:37 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 3:24 pm

Westerwaelder wrote:
Blerg wrote:
Westerwaelder wrote:

So why is government pressure to make this viable such a bad thing? Plenty of room for improvement in your experience and nothing like some pressure from the government to get the job done.


Just because a government wants to push something through doesn't mean it's necessarily a good thing. Politicians are very often pressured into doing something which does not have to make sense. Like I already wrote before, this will impact Lufthansa's competitiveness long-term and might actually make their position in these markets worse. Imagine if they have to cut some domestic flights, international passengers (Middle East, rest of Asia, parts of Europe...) will switch to airlines that can fly them in to their final destination in stead of LH which will force them to ride the train.


I don't understand your point? It's not a good idea because the goverment wants it and it's not in any way in need of validation by the government either. It is the right thing to do if you want to reduce CO2 emissions. But the government has means to make it happen by applying pressure. That's were they come in.

As for competitiveness: for decades we saw very little progress in the auto industry because they shouted it would "limit their competitiveness" (see the conversation about speed limits) and risked jobs. It's the typical dead-stop argument against progress. What's the alternative? We all sit around and wait for others to take the first step? Happy waiting


The alternative is to work together to figure out a plan of action. Not use a crisis situation to impose something that is likely to be damaging in the short-mid term on top of the crisis situation at hand. This is just an attempt to get brownie points off the back of a crisis. It does very little to the goal they want to achieve, if the goal is to lower emissions that is. There are more effective ways to get to that goal than this publicity stunt.
 
User avatar
TLLBRU
Posts: 2
Joined: Tue May 12, 2020 4:43 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 13, 2020 3:35 pm

Blerg wrote:
It's as if SN as a brand is a bit lost.


Could be. But I for one don't care about that.
SN gets you where you need to be when you're in Brussels. In a comfortable way (* A, lounge, etc)
And you don't need to change in a place like FRA all the time, or get the train to CDG or AMS
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Thu May 14, 2020 1:21 pm

As Lufthansa and Swiss are boosting their June networks, Austrian Airlines just announced that they will remain grounded until June 7th.

Could the state aid negotiations have something to do with this extension?

Source: https://www.airliners.de/austrian-juni-boden/55397
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Fri May 15, 2020 3:19 pm

Lufthansa is negotiating with its cabin crew to have their salaries cut by 20% in order to avoid layoffs.

https://www.airliners.de/lufthansa-eins ... iter/55421
 
HB-IWC
Posts: 4101
Joined: Fri Sep 22, 2000 1:09 am

Re: Lufthansa: 10B EUR bailout - Update

Sat May 16, 2020 5:02 am

behramjee wrote:
Any idea which A330 routes of SN are going to be suspended as a result of the 2 A330s being phased out please?


Ouagadougou and Conakry will be dropped from the African network and a number of destinations will see reduced frequencies. So far no indication that any North American route will be axed although this may well still be in the planning stage as part of the JV with LH, UA and others.
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Sat May 16, 2020 5:37 am

HB-IWC wrote:
behramjee wrote:
Any idea which A330 routes of SN are going to be suspended as a result of the 2 A330s being phased out please?


Ouagadougou and Conakry will be dropped from the African network and a number of destinations will see reduced frequencies. So far no indication that any North American route will be axed although this may well still be in the planning stage as part of the JV with LH, UA and others.


Could an A321XLR reach these destinations from Brussels? Maybe that's a plane SN could use to operate these destinations, New York included maybe?
 
SurlyBonds
Posts: 390
Joined: Mon Nov 02, 2015 10:24 am

Re: Lufthansa: 10B EUR bailout - Update

Sat May 16, 2020 6:17 am

sabenapilot wrote:
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.


What was the deal with Estonian Airlines and Cyprus Airways, then?
 
LJ
Posts: 5334
Joined: Wed Nov 17, 1999 8:28 pm

Re: Lufthansa: 10B EUR bailout - Update

Sat May 16, 2020 12:57 pm

SurlyBonds wrote:
What was the deal with Estonian Airlines and Cyprus Airways, then?


The issue for Cyprus Airways was that it received aid next to the loan. This would only be possible if the entity is a viable entity and can only be given once in every 10 years. Cyprus Airways was already bailed out in 2007 and the restructuring plan was deemed unrealistic, hence the ruling that Cyprus Airways had to repay the state aid.

Ruling on Cyprus Airways
https://ec.europa.eu/competition/state_aid/cases/251734/251734_1631242_230_2.pdf

Estonian was also not deemed viable and there was no way it could survive without state aid according to the EU.

Ruling Estonian Airlines
https://ec.europa.eu/competition/state_aid/cases/247780/247780_1730087_223_2.pdf

As such one could argue that state aid for LH is allowed as it's a viable entity under normal circumstances, Cypruhs Airways and Estonian Airlines were not.
 
leghorn
Posts: 1297
Joined: Sun Jan 22, 2017 9:13 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 20, 2020 10:38 am

https://www.bloomberg.com/news/articles ... -rumble-on

Still dragging on with Lufthansa Management becoming impatient.
"So are ye going to give us that €10,000,000,000 or not? Hop to. Los, Los, Los"
 
Noshow
Posts: 1615
Joined: Wed Jun 15, 2016 3:20 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 20, 2020 10:47 am

They seem to want unconditional money for free ASAP. Otherwise they threaten to file for something similar like chapter 11. So much drama.

The government is ready to help but demanding shares, some right to veto, two board seats and interest rates on the credit part of things. That sounds okay to me.
Who else would borrow LH nine billion Euros right now?
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 20, 2020 11:05 am

I wonder if as time goes by, LH, SN and OS might require more money than they are asking now? I mean their reserves and debt is piling on while they are waiting for aid.
 
MIflyer12
Posts: 8060
Joined: Mon Feb 18, 2013 11:58 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 20, 2020 11:05 am

Lufthansa is forecasting a multi-year demand recovery with lots of aircraft to be out of service for 18+ months.

The letter gave further details of Lufthansa’s expected fleet reductions for the coming years. The board said it expected 300 of its aircraft would remain grounded in 2021 as demand for flying recovers only slowly, with 200 remaining out of service into 2022.

https://www.irishtimes.com/business/tra ... -1.4258050
 
Blerg
Posts: 4069
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 20, 2020 11:10 am

Noshow wrote:
They seem to want unconditional money for free ASAP. Otherwise they threaten to file for something similar like chapter 11. So much drama.

The government is ready to help but demanding shares, some right to veto, two board seats and interest rates on the credit part of things. That sounds okay to me.
Who else would borrow LH nine billion Euros right now?


So what's the big deal even if they go into chapter 11? I mean why are they blackmailing the government with that action?
 
max999
Posts: 1219
Joined: Fri Dec 09, 2005 11:05 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 20, 2020 11:56 am

Blerg wrote:
Noshow wrote:
They seem to want unconditional money for free ASAP. Otherwise they threaten to file for something similar like chapter 11. So much drama.

The government is ready to help but demanding shares, some right to veto, two board seats and interest rates on the credit part of things. That sounds okay to me.
Who else would borrow LH nine billion Euros right now?


So what's the big deal even if they go into chapter 11? I mean why are they blackmailing the government with that action?


If LH management is so adamantly against the government's conditions, they could raise money on the financial markets. But seeing how LH has not announced anything about borrowing from the markets, I guess they are balking at the interest rates they would be forced to pay.

In summary, LH management is arrogant; they want to have their cake and eat it, too. They want no strings from the government, but they are also too cheap to pay the interest that's being asked.
All the things I really like to do are either immoral, illegal, or fattening.
 
Flying-Tiger
Posts: 4045
Joined: Mon Aug 23, 1999 5:35 am

Re: Lufthansa: 10B EUR bailout - Update

Wed May 20, 2020 12:06 pm

max999 wrote:
Blerg wrote:
Noshow wrote:
They seem to want unconditional money for free ASAP. Otherwise they threaten to file for something similar like chapter 11. So much drama.

The government is ready to help but demanding shares, some right to veto, two board seats and interest rates on the credit part of things. That sounds okay to me.
Who else would borrow LH nine billion Euros right now?


So what's the big deal even if they go into chapter 11? I mean why are they blackmailing the government with that action?


If LH management is so adamantly against the government's conditions, they could raise money on the financial markets. But seeing how LH has not announced anything about borrowing from the markets, I guess they are balking at the interest rates they would be forced to pay.

In summary, LH management is arrogant; they want to have their cake and eat it, too. They want no strings from the government, but they are also too cheap to pay the interest that's being asked.


In all honesty: that´s their job. They DO have to find the best deal for the company, and if this means hard negotiations so be it.

Every percent in interest saved on a 10 bn bail-out package means saving 100 million EUR less needed to day for it. Or in other words: at least one additional A321neo. That is certainly something worth fighting for, especially if your regional competitors might have gotten a better package than what is currently offered to yours.

There is no level playing field, and you need to negotiate the best deal for your company if you´ve the chance.
Flown: A319/320/321,A332/3,A343/346, A359, A380,AT4,AT7,B712, B732/3/4/5/7/8/9,B742/4,B752/3, B762/763,B772/77W,CR2/7/9/K,ER3/4,E70/75/90/95, F50/70/100,M11,L15,SF3,S20, AR8/1, 142/143,... 330.860 miles and counting.
 
Noshow
Posts: 1615
Joined: Wed Jun 15, 2016 3:20 pm

Re: Lufthansa: 10B EUR bailout - Update

Wed May 20, 2020 12:52 pm

The german government was pretty straightforward with it's requirements.Take it or leave it LH.
  • 1
  • 2
  • 3
  • 4
  • 5
  • 11

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos