Lufthansa Not Ruling Out Bankruptcy Option if Gov't Aid Package Not Arranged, Report Says

MOSCOW (Sputnik) - German flag carrier Lufthansa reserves the right to file for bankruptcy if negotiations with the government over a multi-billion coronavirus-related emergency assistance package fail to result in a consensus, Focus outlet reported on Friday, citing the airline's steering committee.

"The rejection of the support package is a signal to the federal government to renegotiate terms with Brussels," a member of Lufthansa's board said, as quoted by the Focus weekly.

According to the source, as cited in the report, the company believes that bankruptcy can turn more advantageous than state aid and, therefore, does not rule out this option. As an example of advantages, they said that opting out for bankruptcy, Lufthansa will be able to suspend reimbursement for sold tickets with an amount totalling up to 1.8 billion euros. It would also make dismissals and closures of unprofitable subsidiaries easier, it was argued in the report.

With Lufthansa currently losing an estimated one million euros every hour, the company's safety net of 4 billion euros will be used up by the fall.

On Monday, the German government approved a nine-billion-euro ($9.8 billion) bailout for Lufthansa in return for a 20-percent share in the company via emission of additional shares of Deutsche Lufthansa AG, as well as concessions of valuable take-off and landing slots with rival air companies.

Lufthansa's supervisory board rejected these terms on Wednesday.