Lufthansa: Europe's first major airline partially renationalised

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COVID-19 has led to dramatic increases in state aid to national airlines in Europe. More than two decades after Lufthansa's privatisation, the package provided to Lufthansa by Germany will give the state a 20% equity stake and two seats on its supervisory board.

Although Germany will not exercise its voting rights at AGMs on usual resolutions, it has an option to increase its stake to 25% in the event of a takeover of Lufthansa. This would allow it to block special resolutions, acting as a 'poison pill' to any prospective non-German acquirer of Europe's largest airline group by revenue.

This is the only example of the state taking equity in a leading listed European airline group as part of an aid package. Equity investments are also part of state support for Alitalia and airBaltic.

A number of other sizeable European groups are taking state-backed loans, including Air France-KLM, Norwegian, Condor, SAS, Finnair and Aegean Airlines.

The UK has a loan guarantee scheme for companies making a material contribution to the economy regardless of sector or nationality. British Airways, easyJet, Ryanair and Wizz Air have been covered by this.

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