The EU and the German state have agreed on a rescue package for Lufthansa.

It is now up to the airline's board and shareholders to approve the package, which includes a number of concessions from Lufthansa.

The framework for the large support package of almost 100 million kronor to save Lufthansa was announced on Monday. But negotiations between the airline, the German state and the EU have been back and forth, including after a dispute over how many landing rights the company must give up.

Late on Friday, the three parties were reported to have agreed on the package that will provide the airline with support of 9 billion euros, equivalent to just over 94 billion kronor.

In exchange, Lufthansa has agreed to give up 24 landing rights per day in Frankfurt and Munich. Earlier this week, Lufthansa's board had rejected the EU's proposal for 72 landing rights in the two German cities, while the EU rejected an even lower number than 24. The issue is important to ensure that state aid does not have negative effects on competition.

The rights should only be granted to European airlines that have not received any major support packages during the corona crisis, and the company agrees that they should not be granted to low-cost airlines such as Ryanair.

The company is also said to have agreed to expanded climate change efforts, including by renewing its aircraft fleet.

As previously stated, the support package means that the German state will own 20 percent of the shares in the company. The holding is intended to be sold by the end of 2023 at the latest.

In addition, the major German bank KFW is injecting three billion euros into a new loan with state guarantees, while the state is buying convertible bonds from Lufthansa for 5.7 billion, which can be converted into 5 percent of the shares.

All three parties must formally approve the aid package. Lufthansa's board is expected to do so on Monday, and then the company's shareholders will vote on the package in an extraordinary general meeting.

Source: TT