Lufthansa shares soar as board approves €9bn state bailout

(Sharecast News) - Shares in German flag carrier Lufthansa soared on Tuesday after the airline's supervisory board backed a €9bn state bailout.
The deal has to be approved by shareholders at an extraordinary meeting on June 25. Deutsche Lufthansa shares were up 7% on the news at €9.84.

There was a delay in approving the package last week after board members opposed a demand from the European Union that the airline dispose of 72 airport slots unconditionally.

However, the EU backed down and the preliminary agreement will see Lufthansa transfer 24 take-off and landing slots at Frankfurt and Munich airports to other airlines.

The slots will only be available to Europe-based carriers which do not operate any Frankfurt or Munich routes, and have not benefited from substantial state aid within the first 18 months of the agreement.

This would rule out budget carrier Ryanair, which operates services to Frankfurt and rival Easyjet, which flies to Munich and has received a loan from the UK government.

The German government will take a 20% share in the Lufthansa in return for €9bn in equity and loans, which can increase to 25% plus one share if the company is subject to a hostile takeover bid.

Two independent representatives will also be appointed by Berlin to the supervisory board.