The European Commission said on Thursday it has approved German plans to contribute €6 billion to the recapitalisation of Deutsche Lufthansa AG (DLH), the parent company of Lufthansa Group.

The recapitalisation measure is part of a larger support package that also includes a state guarantee on a €3 billion loan that Germany plans to grant to DLH as “individual aid.”

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Germany will contribute €6 billion to Lufthansa’s recapitalisation, together with a €3 billion state guarantee on a loan.

“This substantial amount of aid will help Lufthansa weather the current coronavirus crisis, which has hit the airline sector particularly hard.

“But it comes with strings attached, including to ensure the state is sufficiently remunerated, and further measures to limit distortions of competition.

“In particular, Lufthansa has committed to make available slots and additional assets at its Frankfurt and Munich hub airports, where Lufthansa has significant market power.

“This gives competing carriers the chance to enter those markets, ensuring fair prices and increased choice for European consumers.”

The recapitalisation will be financed by the Economic Stabilisation Fund (Wirtschaftsstabilisierungsfond), a special fund established by Germany in order to provide financial support to German companies affected by the coronavirus outbreak.

The Commission said: “DLH plays a major role in the German economy, notably because it ensures essential connectivity services within Germany through an extensive domestic network.

“It also ensures international connectivity through network airlines based in major hubs such as Munich and Frankfurt airports.

“DLH’s airfreight also contributes significantly to foreign trade, contributing to the German export economy and guaranteeing a steady flow of goods for all citizens in these difficult times.”