Lufthansa's supervisory board was "unable to approve" the €9 billion rescue package negotiated with the German state due to conditions imposed by the EU, the board announced on Wednesday.
The EU's conditions "would lead to a weakening of the hub function at Lufthansa's home airports in Frankfurt and Munich," the Group said in a press release.
"The resulting economic impact on the company and on the planned repayment of the stabilisation measures, as well as possible alternative scenarios, must be analysed intensively," they said.
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While "the supervisory board continues to regard" Germany's measures "as the only viable alternative for maintaining solvency," the board has postponed its decision.
Belgium's plan to rescue Brussels Airlines (which is owned by the Lufthansa Group) does not meet the requirements of the strict European rules on state aid either, according to initial contacts between Belgian authorities and the European Commission, reported L'Echo and De Tijd on Wednesday.
According to European rules, public intervention must be temporary and Member States must have a strategy for exiting the company within six years.
Ryanair CEO Michael O'Leary criticised Germany's state aid grant on Tuesday.
Jason Spinks
The Brussels Times
