Lufthansa too?
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Lufthansa too?
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They want state aid for nothing in return, i.e. without giving the government any seats on the board because the government is likely to stop the management from taking unpopular measures. Hence this game of blackmailing. I don't think that Germany will be left without a flag carrier and wouldn't be too worried about that.
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Lufthansa burned their fingers once when they were state owned and ( Ruhnau era ) run into trouble. They do not want government interference and politicians on their board again. Lufti, once the pride of the nation, almost vanished. They now have a good point - they are a important asset to the economy, and a big employer. May be it is a bit over the top, but here the " better dead than red " philosophy comes into force. Because this was the problem years ago.
Well, that is certainly true, although they did run out of money after they were privatised and then had to go back to the government and ask for more money, which they received. Apart from that, a much bigger employer in germany has no problems at all with government seats on the board, Volkswagen. Despite the diesel scandal they are doing quite fine, well, until the crisis, but they are already spinning their operation back up.
As mentioned above, it is quite clearly a move to blackmail the government, half of which wanted to agree with luftys demands before it anyway. But even those that wanted seats on the board only asked for a minority stake, while Lufthansa is asking for triple their market valuation in government money, not loans or credit guarantees, direct money into the company without acquiring any stake, or any money back once the crisis is over.
As mentioned above, it is quite clearly a move to blackmail the government, half of which wanted to agree with luftys demands before it anyway. But even those that wanted seats on the board only asked for a minority stake, while Lufthansa is asking for triple their market valuation in government money, not loans or credit guarantees, direct money into the company without acquiring any stake, or any money back once the crisis is over.
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Lufthansa is asking for triple their market valuation in government money, not loans or credit guarantees, direct money into the company without acquiring any stake, or any money back once the crisis is over.
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Europe’s largest airline warned late Thursday that it’s running low on cash and won’t be able to survive without state aid from Germany, Switzerland, Austria and Belgium. Each of those countries contributed former national carriers to the sprawling airline group, and negotiations are ongoing for an aid package that could total 10 billion euros ($10.8 billion), according to people familiar with the matter, Bloomberg reported.
Lufthansa, which is burning through €1m an hour, said it was flying just 1 per cent of its usual passenger numbers. On Thursday, the group warned that it was only weeks away from running out of cash. Despite emphasising last month that it would be able to borrow against a fleet worth about €10bn, Lufthansa said it could no longer raise money to pay for liabilities such as ticket refunds on the capital markets. “This leaves government help as the last remaining hope for Lufthansa to remain solvent,” said Daniel Roeska, an airline analyst at Bernstein.
The company has already announced several cost-saving measures, including plans to axe its Cologne-based Germanwings brand, and shrink its Eurowings division. Lufthansa has also been operating without a chief financial officer since the start of the month, after Ulrik Svensson resigned on medical advice, According to The Financial Times.
German airline Lufthansa is seeking a loan of 290 million euros ($313.08 million) loan from the Belgian government to avoid the bankruptcy of its Belgian subsidiary Brussels Airlines, Belgian broadcaster LN24 said on Friday. Belgian Minister of Finance Alexandre De Croo is leading talks with the German carrier, as reported by Reuters.
Lufthansa Group is not alone in being dependent on government assistance. Airlines of the United States have been supported through the CARES Act. This will provide $29 billion in loans and loan guarantees for air carriers as well as $32 billion in payroll protection grants for air carriers and their contractors. The current situation highlights the role of governments in ensuring the survival of crucial businesses during unforeseen circumstances and catastrophes, Simple Flying wrote.
Lufthansa, which is burning through €1m an hour, said it was flying just 1 per cent of its usual passenger numbers. On Thursday, the group warned that it was only weeks away from running out of cash. Despite emphasising last month that it would be able to borrow against a fleet worth about €10bn, Lufthansa said it could no longer raise money to pay for liabilities such as ticket refunds on the capital markets. “This leaves government help as the last remaining hope for Lufthansa to remain solvent,” said Daniel Roeska, an airline analyst at Bernstein.
The company has already announced several cost-saving measures, including plans to axe its Cologne-based Germanwings brand, and shrink its Eurowings division. Lufthansa has also been operating without a chief financial officer since the start of the month, after Ulrik Svensson resigned on medical advice, According to The Financial Times.
German airline Lufthansa is seeking a loan of 290 million euros ($313.08 million) loan from the Belgian government to avoid the bankruptcy of its Belgian subsidiary Brussels Airlines, Belgian broadcaster LN24 said on Friday. Belgian Minister of Finance Alexandre De Croo is leading talks with the German carrier, as reported by Reuters.
Lufthansa Group is not alone in being dependent on government assistance. Airlines of the United States have been supported through the CARES Act. This will provide $29 billion in loans and loan guarantees for air carriers as well as $32 billion in payroll protection grants for air carriers and their contractors. The current situation highlights the role of governments in ensuring the survival of crucial businesses during unforeseen circumstances and catastrophes, Simple Flying wrote.
Lufthansa pilots offered a pay reduction of 45% for two years, in return no compulsory redundancies. Which of course has an influence as that is the biggest aviation group in europe, so expect your employer to ask for more than 50% lower pay without time limit and no job guarantee soon.
https://finance.yahoo.com/news/lufth...codDCU5ALx2JEo
https://finance.yahoo.com/news/lufth...codDCU5ALx2JEo
True, but anyone aiming to lower T&Cs will just omit that tiny word. And the even finer point that they include government pay subsidies into that figure. Most headlines of course omit that word, and funny enough, those that sit at the top quite often just read the headlines. And yes, that is an observation after having worked closely with them as a union rep for more than a decade.
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KJ
It all helps, think of the total sum as a jigsaw puzzle, getting 99% of the pieces in place will help you complete the puzzle but if you are missing that 1% then the whole thing could be stuffed.
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Spohr doesn’t care about anything else right now than driving terms and conditions of crew down and getting rid of expensive pension setups. Pushing company in to insolvency will give him exactly that opportunity and that’s why he’s refusing (it seems) current offers for government funds. Worst outcome he can get is that he manages to get funds without gov strings attached which is second best outcome as far as he’s concerned. Win-win situation for him.
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Carsten Spohr knows no more than we do. He could be right and also hopelessly wrong. I am still of the opinion that IF an EFFECTIVE vaccine is found, traffic will recover a lot quicker than his estimate.
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I'm just saying that the numbers, puzzle or not, won't add up. At my airline a rough estimate of pilot labor cost is 48% of total labor obligation. If pilots gave the airline 3% of what it is they are looking for in cash to survive Covid, then the remaining labor groups (52%) would have to come up with the other 97%. Since there's an agreement that the pilots are paid quite high compared to other groups, I don't see that working. That makes the puzzle incomplete at the 10% mark if you're optimistic.
Therefore something else has to happen. Therefore, if this gets pushed through the pilots took a hit that was not necessary since hypothetically if the government is going to come up with 10 Billion Euros, they can surely come up with another 0.3 Billion euros (3%) and let the pilots keep their hard-fought labor agreement intact.
It's not all that simple, obviously, but when you consider that LH is seeking 10 Billion Euros to survive, it won't come from labor. Nowhere near. So don't even bother with labor concessions, it's a fear-tactic.
Therefore something else has to happen. Therefore, if this gets pushed through the pilots took a hit that was not necessary since hypothetically if the government is going to come up with 10 Billion Euros, they can surely come up with another 0.3 Billion euros (3%) and let the pilots keep their hard-fought labor agreement intact.
It's not all that simple, obviously, but when you consider that LH is seeking 10 Billion Euros to survive, it won't come from labor. Nowhere near. So don't even bother with labor concessions, it's a fear-tactic.
