Frankfurt (AFP)

The leading air transport group in Europe, Lufthansa, announced Thursday to negotiate with the German state with a view to partial nationalization in order to avoid bankruptcy in the face of the impact of the new coronavirus.

Berlin could thus make a comeback after more than 20 years of absence from the capital of the former public company, facing like the entire aviation sector an unprecedented crisis: 700 of its 760 planes are grounded and the number of passengers fell 99%.

While the group loses a million euros per hour, it is in these negotiations "to avoid bankruptcy", explained this week the boss Carsten Spohr.

Among the options discussed: a loan guaranteed by Berlin and "an entry of the State into the capital of the company" of up to 25% and an action, that is to say a blocking minority.

In addition, the State "aims to obtain a seat on the supervisory board" and therefore to have its say, added the group in a press release.

It thus confirms for the first time the content of these ongoing negotiations since March. They have become more complicated recently around the political question of counterparties.

- Political divisions -

Because if the question in Berlin is no longer to save or not save the group, the leadership of Lufthansa refuses to be influenced by the political powers of the countries in which it is active, namely, in addition to Germany, Austria, Switzerland and Belgium.

"We need public aid but not nationalized management," Spohr reiterated this week at the general meeting of shareholders.

Within Angela Merkel's German government coalition, between conservatives and social democrats, opinions would also be divided.

"The state is not the idiot of service which is limited to paying the money and then no longer has a say," said one of the leaders of the Social Democratic party, Carsten Schneider, on Monday. Die Welt.

The chancellor's conservatives oppose participation with the right to vote, according to the daily Handelsblatt.

"Negotiations are underway and the process of reaching a political agreement is still going on," said Lufthansa simply.

A rescue by partial nationalization recalls in Germany the fate of the bank Commerzbank, which benefited from 18 billion euros of public money in the middle of the financial crisis of 2008, and of which the State still holds 15%.

If the bank was saved from bankruptcy, the German participation is now worth only a fraction of the purchase price, the share price having melted in recent years.

- Losses -

Currently, the group still has some 4 billion euros in cash, said Spohr, but this level should drop rapidly in the coming weeks.

In the first quarter, Lufthansa posted an operating loss of 1.2 billion and expects an even worse result over the following three months; more than 80,000 of its 130,000 employees are partially unemployed.

And the outlook is not bright: the group expects a "notable restart at the earliest in the spring" and a return to a "new normal" by before 2023, said Spohr, who launched a restructuring aimed at reduce the fleet by almost 100 planes, threatening around 10,000 jobs.

Its competitors are also in turmoil: the IAG group fell into the red in the first quarter and announced its intention to cut up to 12,000 jobs at its company British Airways.

Ryanair has already announced plans to cut 3,000 jobs, as does Virgin Atlantic.

Air France-KLM has lost 1.8 billion euros in three months and must receive aid of 7 billion euros from the French State to keep its head above water.

For Lufthansa, Switzerland will also guarantee 1.2 billion euros in loans to its local subsidiaries, Swiss and Edelweiss.

In Austria, Austrian Airlines (AUA), another subsidiary of Lufthansa, asked Tuesday for public aid of 767 million euros.

© 2020 AFP