Bailout for Lufthansa triggers debate
After several months of negotiations Lufthansa shareholders approved a government rescue package of nine billion euros on Thursday. Like almost all other airlines, the German company has been hard hit by coronavirus crisis. For commentators, the decision is reason enough to reconsider not just the future of former state-owned airlines in their countries, but that of the sector in general.
Things are getting tight in the airline industry
Despite government aid, nationally prominent airlines are facing hard times, the Wiener Zeitung believes:
“In times when the state has a stronger hand in economic activity than it has had for decades, the so-called flag carriers (meaning state-owned companies such as Air France, Lufthansa, KLM, AUA and Finnair) have a clear advantage. States are bailing out 'their' airlines, while budget companies must draw on their capital reserves. ... Nevertheless: flag carriers are also likely to face serious 'post-Covid' problems. ... For climate reasons lucrative short-haul flights should be replaced by high-speed rail connections in the coming decades. And frequent business travelers have learned in the past few months how convenient and efficient teleconferencing is. As a result, the competition in the airline segment will become even more fierce than it was before.”
KLM needs to go green
The Netherlands has announced that it will provide KLM with around 3.4 billion euros in financial support. De Volkskrant complains that the state should have attached more strings to the funds:
“This state aid has not been made contingent on any binding sustainability requirements such as reducing emissions or canceling short-haul flights, which would make rail an alternative. The lack of strict 'green' conditions is a mistake that makes it clear that this state aid is primarily focused on short-term goals. Such demands would not ruin KLM but rather give the company a competitive advantage as soon as sustainable flying becomes the norm.”
Playing a dangerous game
The ongoing uncertainty at parent company Lufthansa has also put the future of its subsidiary Brussels Airlines at risk, La Libre Belgique writes in a peeved tone:
“Once again, the attitude of Lufthansa's executive board is questionable. Not only is the Germans' deceitful poker-playing scaring Brussels Airlines' employees, it's also destroying the passengers' trust. Meanwhile in our neighbouring country, Air France quickly accepted the government aid it was offered and then began the inevitable restructuring. The advantage? Both the company and the customers were promptly reassured about the company's future, right at the start of this decisive summer for the sector.”