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Lufthansa balks at EU conditions for German aid package

Deutsche Lufthansa AG’s board of directors postponed a decision to accept a $9.8 billion economic relief package from the German government after European Union competition authorities said the airline would have to relinquish valuable slots at its hubs in Frankfurt and Munich.

Giving up takeoff and landing slots would harm the company’s hub-and-spoke business model and finances, the board said in a statement on Wednesday. Nonetheless, it continues to regard Germany’s “stabilization measures as the only viable alternative for maintaining solvency.”

The EU demands led the board to also postpone a general meeting to seek shareholder approval for the bailout offer.

Slots are essentially flight quotas that authorities assign to airlines at busy airports and can give to competitors if most of the rights aren’t utilized in a given year.

Lufthansa has been seeking aid in European countries where it has subsidiaries. Switzerland last month agreed to provide emergency support to one of those companies, Swiss International Air Lines.

Under Prime Minister Angela Merkel’s plan, the government would take a 20% stake in Lufthansa in return for an injection of capital and loans.

Irish low-cost carrier Ryanair is pressing the EU to break Lufthansa’s fortress hold on Frankfurt and Munich, where it controls three-quarters of the slots, and in Vienna and Zurich, where Austrian Airlines and SWISS, respectively, dominate, according to the Financial Times.

German politicians also opposed the idea of dismantling the existing arrangement to benefit a low-cost carrier, the newspaper said.

Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at