European airlines of all sizes have gotten at least some help from their governments. But flag carriers like Lufthansa are in discussions to receive aid that’s on another level.
The German airline could receive more than $12 billion worth of government-backed loans and equity stakes. Most of that support is expected to come from the German government, but the Belgian, Swiss, and Austrian authorities may also chip in to prop up Lufthansa fleets that operate in their countries, like Brussels Airlines and Austrian Airlines.
The bailout tab for Lufthansa is running well in excess of the market capitalization of International Airlines Group, the parent company of UK airline British Airways and Spain’s Iberia, among other brands. If that government aid, most of which consists of loans, had been used for an acquisition spree instead, it could have snapped up IAG and low-cost airline easyJet, with cash left over to spare.