Lufthansa Balks At EU Conditions For German Aid Package
Deutsche Lufthansa AG (OTC: DLAKY) board of directors postponed a decision to accept a $9.8 billion economic relief package from the German government after European Union competition authorities said the airline would have to relinquish valuable slots at its hubs in Frankfurt and Munich. Giving up takeoff and landing slots would harm the company's hub-and-spoke business model and finances, the board said in a statement on Wednesday. Slots are essentially flight quotas that authorities assign to airlines at busy airports and can give to competitors if most of the rights aren't utilized in a given year. Irish low-cost carrier Ryanair Holdings plc (NASDAQ: RYAAY) is pressing the EU to break Lufthansa's fortress hold on Frankfurt and Munich, where it controls three-quarters of the slots, and in Vienna and Zurich, where American Airlines Group Inc. (NASDAQ: AAL) and SWISS, respectively, dominate, according to the Financial Times.