Deutsche Lufthansa AG (LHA), Europe’s second-biggest airline, will boost the equity of its Austrian Airlines unit by 140 million euros ($183 million) and approve the lease of Airbus SAS jets to ensure the business’s survival.
Lufthansa’s supervisory board endorsed the payment to alleviate Austrian Air’s “critical” situation, on the condition that agreed restructuring plans be fully implemented, the Cologne, Germany-based company said today.
“In return, we expect an indispensable contribution from works councils and trade unions,” Chief Executive Officer Christoph Franz said in Frankfurt. “Market-oriented, competitive employment conditions” must be enforced for air crew, he added.
The lease of seven Airbus A320 single-aisle aircraft by Austrian was also approved by the board, with 11 Boeing Co. (BA) 737s to be sold, he said.
Franz said that Lufthansa will press on with the sale of its unprofitable U.K. unit BMI to International Consolidated Airlines Group SA. The British Airways parent has offered concessions to European Union regulators reviewing the bid, and the deadline for a ruling has been extended to March 30.
“Despite extensive restructuring measures, the turnaround could not be achieved and there was and is unfortunately no alternative to the sale,” the CEO said.
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