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.