Lufthansa on verge of bankruptcy without a bailout – official statement

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• Samuel says:

  25 Apr25 April 12:26

  Lufthansa deserves to go bust. They are too dominant on the European market and are squeezing their subsidiearies for example with their idea of merging Brussels Airlines with Eurowings, an LCC. Lufthansa could start by selling their subsidiaries, that should give a good amount of cash. And if they are confident they have a good business, they should go to commercial banks. Relying on the taxpayer for such a bailout is arrogant.

  • Don says:

    25 Apr25 April 13:17

    SN and EW are worth nothing. Very expensive legacy crew in SN, clapped out worthless airframes. Who would want to buy that except the Belgian government? Has it ever made a decent profit?

    The vast majority of SN’s network could be flown by Ryanair and Wizz. I’d imagine the only part of SN that makes any cash is the African network which is governed by monopoly bilaterals that will have very little feed to the European network that SN maintain.

• Don says:

  25 Apr25 April 13:13

  Why not let it go to the wall? Right now. In the time taken to slim it down, reemploy staff, there might actually be some pax who want to fly.

  Why bail it out now to then have the situation continue to go on for months. Burning taxpayers cash for nothing. Screw the expensive legacy staff contracts. Sell the subsidiaries which were terrible acquisitions. LH haven’t made a single decent purchase. BD (cheaper just to buy the LHR slots) OS, SN all rubbish, we can argue about LX.

  Stop dumping fares!

  It doesn’t have a god-given right to exist and finally a genuinely competitive airline can take its place using a government loan a fraction of what they are asking for with a huge chance of success. Germany is one of the few EU countries that has the potential to have a profitable home carrier but not straddled with pensions and all these past awful decisions and liabilities

  • Rob says:

    25 Apr25 April 13:16

    Germany is actually the WORST country in Europe if you want a profitable home carrier, because it has effectively four key cities of equal standing – Frankfurt, Munich, Dusseldorf and Berlin.

    If Manchester and Edinburgh were genuinely equivalent to London we’d have a similar issue.

    • Heathrow Flyer says:

      25 Apr25 April 13:25

      The benefit of the U.K. having a primate city.

      • Nick_C says:

        25 Apr25 April 13:30

        I felt London was a primate city. That’s why I moved out 😉

      • Thomas Howard says:

        25 Apr25 April 13:33

        Primate city? The racism smh.

        • Lady London says:

          25 Apr25 April 13:59

          Not unless there’s an inappropriate link already in your head. That didn’t come from what the poster said.

        • Goodboy says:

          25 Apr25 April 15:13

          Seems to be in lots of people heads though? Of all races.

    • Don says:

      25 Apr25 April 13:28

      I don’t agree. In the UK BA has to force pax to connect via LHR cos there is no business to run point to point from the regions or a Eurohub. BA prices have got to the point where they are hardly gunning for connecting pax these days. It tried and failed outside London, heck even LGW is a fledgling case. The UK focusses it’s economy around the South East and only the SE. Moving stuff to the North is a token effort. Germany has multiple industrial heartlands, Ruhr, Hesse, Bavaria and one day, coming faster, not just poor but sexy, Berlin!

      LH Group cover the four cities you mention except BER which is an outlier since the War and is still a very SH market. They moved DUS to EW and 4U to reduce cost and in the meantime AB went bust there as well. I recall one of the biggest issues that LH had with their small TXL SH operation was just the cost base they operate from. They couldn’t sell TXL-CDG for €39 like EZY could.

      That brings me back to my point. Shut it down, start again. If you keep it going you’ll have never ending staff disputes when you try to reduce their salaries. This is once in a lifetime opportunity. Pilots and crew will be ten to the dozen, desperate for work and will take what they’re given.

      MUC and FRA work quite nicely for LH. They’re an example of not needing to focus on one city like BA and LHR. Each city can stand on its own with point to point. It’s not just capacity reasons that MUC has certain routes that FRA doesn’t.

    • FLYGVA says:

      25 Apr25 April 13:51

      You are absolutely right – additional problem, we (I am German) are a federal state. This means, the federal state have additional power and force companies to offer services, even if they are not really able to make money on certain routes. This is necessary to get the politics behind you. And we are not centralized as France is, also not in regard to our transportation network. Most high speed rails are linked to Paris.

      Unthinkable in Germany. Also unthinkable for many to have a connection on a domestic flight. A direct connection from the capitals of the federal states to other countries are a factor for the importance.

      Düsseldorf – capital of the state of North Rhine Westphalia which has the most inhabitants – was not really happy, as LH reduced their presence in DUS. BA / KL / AF have it much easier, as their have only one hub. Which would not happen …

      We want to have full service on our country, but do not want to have the noise, paying high prices for fares. Of course, we want to have flexibility, quality. Many people pay a premium to fly our flag carrier, but LH exaggerated a bit in regard to the “premium” and the lack / reduction of service.

      In so far, using Eurowings was a good way to reduce costs. Unfortunately this “powered by Lufthansa” did not work as it should be, as the problems in the take over of Air Berlin caused a lot of delays – and fell back to Lufthansa.

      And LH considers itself still as one of the best airlines which one of the best products.. This did not work that well in the last couple of month.

      Shutting LH down would not work … they are too large and have a too long history. I doubt that the Swissair / Swiss approach would work (again).

    • Spaghetti Town says:

      25 Apr25 April 14:22

      Thats why we’re easily able to compete with New York. The UK has focused all the effort in one city. The rest are better off being satellite cities.

      • Mr(s) Entitled says:

        25 Apr25 April 16:57

        London is almost a small country. It competes with other uber cities such a New York and Tokyo.

        Rather than considering Manchester, Birmingham, Edinburgh etc as satalite cities we would be much better off considering them as competitors at Tier 2 level. Compete with Boston, Stockholm, Tel Aviv, Madrid etc.

        It would massively benefit the country if these cities grew their respective GDP’s. Pulling investment from London or New York is hard. Pulling it from elsewhere? Why not. Think outside of the four walls/island.

        • Spaghetti Town says:

          25 Apr25 April 17:21

          Fair point that actually.

          Tokyo is a monster city. Never been but from what I hear. Always wanted to go to Japan.

      • J says:

        25 Apr25 April 19:24

        And where has that got the UK? UK is a basket case vs Germany, parts of the UK poorer than anywhere in Germany or the Netherlands. I don’t think London being so mighty and dominant, sucking life from the rest of the country is such a good thing… Interesting story below, it’s shameful how divided the UK is and how big the gap is between its rich and poor regions.

        https://www.theguardian.com/business/2019/dec/10/number-of-europes-poorest-regions-in-uk-more-than-doubles

        • Lawrence says:

          25 Apr25 April 23:59

          Guardian? Really? Honestly….

        • Spaghetti Town says:

          26 Apr26 April 00:41

          I would of read the article if it came from a more balanced paper. Mirror, Star, Sun, Mail, Guardian is just garbage.

        • JohnG says:

          26 Apr26 April 16:46

          Oh come on. The point was stats from an external source, unless you think The Guardian will have lied in reporting them (which may just be possible based on the ridiculousness of that alternatives list) then you’re just blathering on about your view on newspaper bias rather than actually discussing the point you are responding to.

        • Spaghetti Town says:

          26 Apr26 April 18:31

          @ John G. The guardian is rubbish. very left wing much like the sun and mail are very right wing.

        • J says:

          26 Apr26 April 22:46

          The point is that the UK is a basket case compared to Germany. The UK likes to compare itself with Germany and the Netherlands but it you strip out London and the South East it’s not even in the same league. Add a hard brexit to the costs of coronavirus and I expect the UK will fall even further behind, perhaps even needing the help of the IMF again.

• Keith Young says:

  25 Apr25 April 16:00

  Was due to go on one of those Swiss deals today but that got cancelled and there is no way I can get my money back despite the assurances on the Swiss website. The only chance is my credit card company but I suspect that isn’t going to work although I’ll give it a go. We did send Swiss an email, the trip was booked on the Swiss website

  Please note that the flight cancellation was made by Eithad Airways, the operating carrier of your flight whom you may contact regarding the possible refund.

  I have checked, we were booked on LX4200 from Zurich to Abu Dhabi on Swiss.

  Any suggestion greatly appreciated.

  • Don says:

    25 Apr25 April 16:12

    Is it a 724 ticket? Booked direct? If yes to both, responsibility is LX.

    • Keith Young says:

      25 Apr25 April 16:15

      Hi Dan. Yes 724.

      • Don says:

        25 Apr25 April 16:47

        Then your beef is with LX not EY. Process a chargeback with your card company.

• Peter North says:

  25 Apr25 April 16:17

  Lynne Powis at the government presser today is like listening to someone reading the telephone directory.

• Matthew says:

  25 Apr25 April 16:32

  I have no sympathy for LH. The way they have behaved over Covid-19 cancellations is poor. My flights from FRA to BRS were cancelled, they did not even send an email to inform me. It is impossible to get through for a refund. I have tried a chargeback claim via credit card, they came back saying LH can offer a new flight later and their T&C’s mean they can avoid repaying.
  I have now written to the card issuer stating section 75 of the 1974 consumer credit act, makes them jointly liable, and LH cannot insist on a new flight booking as EU regulations overide their T&C and give me the right to a refund. The card issuer has to give me a letter of stalemate if they refuse a refund again, then I can sue them, or go to the ombudsman. “Which” has a good template letter to start a claim for section 75 rights.
  None of this hassle would be needed if LH repaid the cancelled tickets they are required to do by law. I will never book with then again if they survive.
  Everyone stay well and safe.

  • Don says:

    25 Apr25 April 16:48

    Matthew who is your card issuer? I had no issues with Amex.

    • Matthew says:

      25 Apr25 April 17:21

      It is MBNA, now owned by lloyds. They were very good when Fly BMI went through. I think they must be swamped by claims, and dont want to upset LH, but who cares, the law is the law.

      • Lady London says:

        25 Apr25 April 18:20

        And also @ Matthew strictly speaking EU261/2004 statute says they have to give you a refund within 7 days.

        Most of us would give more. But if you’re faced with this unfairness and it’s already more than 7 days, or if the airline says their process will take longer than 7 days,vthen they are already in breach of the statute so that means you can ask your credit card company.

  • Paul says:

    25 Apr25 April 17:09

    It’s helpful to know this. I found a reasonable NCL – MUC – BKK flight in Premium Economy for July.

    Probably won’t book it now. I was relying on a refund in case the flights wouldn’t go ahead.

    Worrying times. The alternative is AF / KLM in economy.

    • J says:

      25 Apr25 April 21:37

      Perfectly safe to book with LH, not like Germany has another airline – LH is very protected, the government will ensure it is OK. Although would not have any worries booking with AF/KLM either.

• Alex Sm says:

  25 Apr25 April 17:14

  My colleague wrote an interesting blog the other day about the conditions which EU governments (Italy, France, Austria) attach to airline bailouts. Most relate to climate and green obligations. What is the conditionality of a potential German bailout for LH, do you think?

• Jim says:

  25 Apr25 April 17:50

  Interesting stuff, Rob. Could you link to the Citi note? Thanks.

  • Rob says:

    25 Apr25 April 22:02

    No, it’s not a public document. Bankers friends send them along.

• Ele says:

  26 Apr26 April 16:40

  We have October flights to Oz (on the Swiss 241 deal – operated by CX and Singapore but on LX codes). Just would appreciate advice on options as it’s unlikely the trip will go ahead anyway, and if Lufthansa go under I don’t wish to lose > 10k… Do I need to wait for the airline to cancel the flights / go bust / re-schedule / re-route in a way that isn’t satisfactory….. or can I cancel now and apply for a cash refund, or claim on a S75 with Amex? Thanks.

  • Qwertyknowsbest says:

    26 Apr26 April 17:14

    Wait for cancellation or bankruptcy.

  • Riccatti says:

    27 Apr27 April 02:59

    There is a risk that LH will not pass the money to SQ and CX. Between the airlines it usually happens after the fact.

  • Paul says:

    28 Apr28 April 20:02

    Did you pay on a UK credit card? If you upgrade something – pay for extra baggage with a credit card it might be covered by consumer credit act.

    • Ele says:

      30 Apr30 April 13:44

      Yes paid for the trip on BA AMEX. So based on these comments I’ll wait until the flights cancel / LH go bust then put a claim in via Amex. Thank you all.

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