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German government opposes Lufthansa executive bonuses
6 hours ago6 hours ago
Berlin says it opposes multimillion-euro payouts for Lufthansa executives. The German state saved the airline from bankruptcy during the COVID-19 pandemic, and the government says the bonuses violate the bailout terms.
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A German government spokesman on Wednesday said the government would seek legal clarification for Lufthansa’s plan to distribute bonuses to bosses — despite the fact it recently needed a government bailout to avoid bankruptcy.
The state took a 20% stake in Germany’s national carrier when borders closed to the coronavirus pandemic in 2020 under a €9 billion ($9.5 billion) package to rescue it from bankruptcy.
How Berlin responded
Financial daily newspaper Handelsblatt reported on Tuesday that six Lufthansa board members were to receive bonuses of millions of euros for 2021 and 2022 — while the airline was still receiving state aid.
The German government sold all its shares in the airline in September — making a tidy €700 million profit — and Lufthansa has paid back all of the aid it also received.
Berlin says the bonuses would violate the terms of the bailout agreement.
“The government sees this differently,” German government spokesman Steffen Hebestreit said, adding that the government would seek answers from the carrier.
Lufthansa strike
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“Now we have to discuss these different legal positions with Lufthansa, and then we will have to see what the outcome is,” he told a press briefing.
Lufthansa has not commented on whether the bonus payments are for the time the company was receiving help, but it has said bonuses won’t be paid out until 2025.
The question could be one of how long Lufthansa is restricted in the way it uses its profits after the end of the bailout.
Unions react, issue demand
The Lufthansa group, which includes Eurowings, Austrian, Swiss and Brussels Airlines, last week significantly raised its profit outlook for 2022. It cited continued “strong demand for air travel.”
Since reports of the huge bonuses emerged, unions have said ordinary workers should also benefit from the airline’s upturn in fortunes.
“Lufthansa employees gave their all during the pandemic and accepted tough cuts to do their part to save the company,” said Daniel Kassa Mbuambi, from the flight attendant union UFO.
He added that the executive board should recognize the “decisive part” played by all staff and give bonuses or special payments to employees.
The airline, which cut thousands of employees during the pandemic, has faced strike action this year by pilots and ground staff over worker shortages and pay amid rising inflation.
rc/es (AFP, dpa, AP)
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