Lufthansa Supervisory Board unhappy with EU conditions, suspends convocation of General Meeting for approval of rescue package
At its meeting today, the Supervisory Board of Deutsche Lufthansa AG discussed the acceptance of the stabilisation package offered by the Economic Stabilisation Fund (WSF) of the Federal Republic of Germany, including the necessary convocation of a General Meeting.
The Supervisory Board has taken note of the conditions currently indicated by the EU Commission. They would lead to a weakening of the hub function at Lufthansa’s home airports in Frankfurt and Munich. The resulting economic impact on the company and on the planned repayment of the stabilisation measures, as well as possible alternative scenarios, must be analysed intensively.
Against this background, the Supervisory Board was unable to approve the stabilisation package in connection with the EU conditions. However, the Supervisory Board continues to regard WSF stabilisation measures as the only viable alternative for maintaining solvency.
Deutsche Lufthansa AG will not convene an Extraordinary General Meeting for the implementation of the stabilisation measures for the time being.
Lufthansa pilots’ union wants Lufthansa to remain competitive by maintaining all slots
EU Commission.
According to media reports, Brussels is demanding that
Lufthansa make slots available to competitors. Vereinigung
Cockpit criticises this sharply and expects all
responsible authorities not to distort the competition.
“The approximately 140,000 jobs at Lufthansa must not be jeopardised by nonsensical and competition-distorting requirements,” said Markus Wahl, President of Vereinigung Cockpit. “It cannot be the goal of German and European rescue policies to protect companies from bankruptcy with billions of cash injections and at the same time to place them at a severe disadvantage through restrictions elsewhere. When restarting flight operations, all market participants must have the same opportunities they had before the crisis had.”
Some low-cost airlines also have large financial reserves because they have disregarded the rights of employees for years and have recently also received financial aid from the state themselves. They are in a better position now because they have passed their business risk on to their employees. Such companies can get rid of employees in bogus self-employment and other atypical employment relationships from one day to the next.
If Lufthansa slots were to be handed over to such airlines, the EU would directly promote social dumping, bogus self-employment among pilots and an erosion of labour standards. Vereinigung Cockpit therefore calls for social and qualitative criteria to be included in decisions at EU level.
Background
The Lufthansa hub system is based on connecting flights via the two hubs in Frankfurt and Munich. As a network airline, it can only work profitably with this system. Because of this system, the loss of take-off and landing rights would hit Lufthansa hard and unfairly disadvantage the airline.
The 80-20 rule for slots has been deliberately suspended to prevent market distortion. No airline can secure future take-off and landing rights through empty or underutilised, and therefore unprofitable, flights. Instead, all airlines initially keep their slots, regardless of whether they fly or not. This important and correct exception must not be circumvented by additional conditions for the submission of slots. This would run counter to the basic idea of competition on a “level playing field” and would not only be unnecessary from a market economy perspective, but also counterproductive.
Wednesday, May 27, 2020
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