Lufthansa accuses EU of damaging its business model
Airline forced to surrender slots in return for approval of a €9bn state bailout
Lufthansa has accused the European Commission of causing permanent damage to its business model by forcing it to surrender slots at its Frankfurt and Munich hubs in return for approval of a €9bn bailout by the German government.
Last month, Margrethe Vestager, the EU’s competition chief, warned there was a “high risk” of market distortion if Lufthansa’s rescue package did not include remedies such as the relinquishing of take-off and landing slots.
After prolonged negotiations, the airline’s supervisory board agreed to give up 24 slots in Germany to competitors, and the bailout deal was subsequently voted through by shareholders.
But in a briefing published on Tuesday, Lufthansa said it was “incomprehensible that the EU Commission should intervene in this sensitive production structure during the worst crisis in civil aviation”.
Using Frankfurt and Munich as international transfer hubs is crucial to the airline’s competitiveness, the briefing said, because no single German airport has the number of potential customers living nearby that Heathrow does in London and Charles de Gaulle in Paris.
Without carrying passengers from connecting flights, long-haul flights from Germany “can no longer be operated economically”, said Lufthansa, adding: “In future, [the surrender of slots] will directly or indirectly strengthen long-haul providers outside Europe.”
The Lufthansa bailout, which involved the German government taking a stake in the carrier almost a quarter of a century after it was first privatised, has been criticised by European rival Ryanair, which has said it will launch a legal challenge.
In June, Carsten Spohr, Lufthansa chief executive, admitted the aid package was larger than what the airline needed to survive, and was designed to ensure it maintains a “global leading position”.
Ryanair boss Michael O’Leary said the excess aid “massively distorts the playing field” and accused the German government of “saving jobs in Germany at the expense of jobs in every other country”.
Lufthansa is burning through €1m an hour, with hundreds of its planes still grounded because of the pandemic, and has warned it will be left with 22,000 excess staff as it becomes a permanently smaller business.
The final number of job cuts is subject to negotiations with unions.