Coronavirus Pandemic isn’t making things any easier. The world economy is taking a massive hit from the pandemic, and people are out of jobs. Moreover, the travel industry is at a loss. It will take the next two years to get the economy back to normal. Travel has been suspended for the time being. That’s why airlines are also out of business.
It is hard for airlines to run a large business without any income. To maintain a wide range of workforce without income is daunting. That’s why Lufthansa is in trouble. The company is burning $1.1 million every hour. And without any active source of income, the company will soon run out of money.
That’s why Germany has the power to save the airlines. Lufthansa owns airlines in Germany, Switzerland, Austria, and Belgium. It has suffered a loss of 1.2 billion ($1.3 billion) in the first quarter. The company soon needs to find a solution.
It came to notice this Thursday that Lufthansa is negotiating for a “stabilization package” from Germany’s Federal Economic Stabilization Fund. This fund is set out to help companies that are suffering because of the coronavirus pandemic.
Everyone at Lufthansa is now looking for a way to save the airlines. CEO Carsten Spohr said that they need government support now more than ever. But they could do without government management. If Germany helps out Lufthansa, it will own 25% of the total shares of the company.