The German government announced Monday that it agreed to a €9 billion ($9.8 billion) deal to help flag carrier Lufthansa survive an “existential emergency” caused by the coronavirus pandemic.
The largest German corporate rescue will give the government a 20% stake in the group, which owns airlines in Germany, Austria, Switzerland and Belgium, and two seats on its supervisory board.
"Before the pandemic, the company was healthy and profitable and had good prospects for the future, but it faces an existential emergency because of the current corona crisis," the government said in the statement. "The federal government's stabilization package takes into account the needs of the company as well as the needs of taxpayers and employees of the Lufthansa Group."
“When the company is afloat again, the state will sell its shares,” German Finance Minister Olaf Scholz said during the press conference on Monday, according to the CNN.
But the deal still has to be approved by the Lufthansa’s shareholders and the European Commission.
If approved it will be the largest airline rescue in Europe. Air France got a €7 billion ($7.66 billion) loan from the French government last month.
Deutsche Lufthansa AG is the largest airline of Germany which, when combined with its subsidiaries, is the second largest airline in Europe in terms of passengers carried.
Lufthansa is also one of the five founding members of Star Alliance, the world's largest airline alliance, formed in 1997.