Frankfurt (AFP)

The rescue of 9 billion euros from Lufthansa passed a crucial new step on Friday with an agreement between the German government and the European Commission on the main conditions of this operation which must avoid the bankruptcy of the group.

The airline giant will have to leave more room for competition at its two main German airports, the group said in a statement. A spokesperson for the European executive and the German government also confirmed that an agreement had been reached.

The compromise provides that Lufthansa will cede to competitors up to 24 take-off and landing slots, very coveted and precious rights for the companies, representing 8 aircraft parked, according to the company.

The executive board "accepts the concessions", the "size of which has been reduced" compared to what was first mentioned, and is now awaiting the green light from the supervisory body, notes Lufthansa in the press release.

On Wednesday, this body had refused to approve the rescue plan, which includes the return of the state to the capital of the group, believing that European demands would "weaken" the company.

The Commission had asked that Lufthansa sell up to 20 planes and all the more slots, according to a source close to the negotiations.

These rights, shared equally at the airports of Frankfurt and Munich, will be reserved for "new competitors" for a year and a half before companies already present in these two cities can buy them if they are still available.

"The slots should only be taken up by a European competitor who has not himself received public aid due to the coronavirus pandemic," added the German group.

- Hemorrhage of cash -

An extraordinary general meeting of shareholders must be convened "soon". They also have to approve the bailout as it involves a capital increase.

The Ministry of Economy mentioned in a press release an "important step (...) opening the way to the consultation of the general assembly", while "beyond that, negotiations continue".

And time is running out, as the pandemic has brought global air transport almost to a halt, plunging the sector into an unprecedented crisis.

The cash reserves of the German group, which is losing a million euros per hour and currently only transporting 1% of the usual number of passengers, are only enough for a few weeks. He also does not expect a rapid reboot. It therefore launched a restructuring aimed at reducing its fleet of 100 planes, threatening around 10,000 jobs.

Negotiations are continuing for the Belgian subsidiary Brussels Airlines, which announced in mid-May plans to cut a quarter of its workforce, and Austrian Airlines, which has asked Austria for 767 million euros.

Bern will guarantee 1.2 billion euros in loans to the Swiss and Edelweiss subsidiaries.

- Entry into capital, loan -

The rescue provides that the state will take 20% of the group for 300 million euros, in addition to inject 5.7 billion euros of funds without voting rights, of which one billion can be converted into shares. It would be the first time that the German state has returned to the capital of the company since its complete privatization in 1997.

Berlin reserves the right to increase its stake to 25% and one share, ie the blocking minority, but only "in the event of a takeover bid by a third party" or non-payment of interest.

Germany also guarantees a loan of 3 billion euros and obtains two seats on the supervisory board of Lufthansa, which is prohibited from paying dividends and paying bonuses to its leaders.

Ryanair has announced that it wants to challenge the plan before European justice, calling it "illegal state aid which will considerably distort competition".

The demand for massive abandonment of "slots" had provoked an outcry in Germany.

Transport Minister Andreas Scheuer remarked in an interview with Bild that the European executive had not, "for other companies", added "extra weight" through the rescue conditions.

Brussels notably validated early May the support of 7 billion euros by Paris for Air France.

© 2020 AFP