Insolvency protection from creditors 'not yet off the table' for Lufthansa amid Covid-19 storm

The idea of German flagship carrier Lufthansa using a type of protection from creditors is not yet off the table, a source at the airline said.

Lufthansa was still considering the insolvency protection procedure as an alternative if a rescue package limited the company’s ability to compete too much, the source said.

Under consideration is a type of creditor protection scheme which requires that a company is not yet insolvent and in which its management can remain in place to execute the restructuring.

Lufthansa and the Berlin government are pursuing a €9bn rescue package, company and government sources had said earlier.

Meanwhile, Southwest Airlines — the US airline which was the business template for Ryanair over 20 years ago — has posted a $94m (€86.8m) quarterly net loss, its first in nine years, and warned of drastic revenue drops ahead as it sought to raise another $2.6bn to help weather the coronavirus pandemic.

The Covid-19 crisis has decimated travel demand, with unprecedented flight cancellations in the second half of March, forcing airlines to preserve and raise cash.

Reuters and Irish Examiner