Lufthansa shares jumped 10% today after its top shareholder dropped his objections to a €9 billion government bailout for the German airline brought to the brink of collapse by the Covid-19 pandemic.
"I will vote for the proposal," billionaire investor Heinz Hermann Thiele, who recently increased his stake in Lufthansa to 15.5%, told the Frankfurter Allgemeine newspaper.
His endorsement amounts to an 11th-hour reprieve for the airline after fears had swirled he might veto the proposed rescue, which will see the German state take a 20% stake and board seats, diluting existing shareholdings.
Shareholders are due to vote on the plan later today at a meeting being held online due to the pandemic. Thiele has a virtual veto, as only 38% of shareholders have registered to vote.
European Union regulators also today approved Lufthansa's €6 billion recapitalisation, part of the bailout deal, subject to a ban on dividends, share buybacks and some acquisitions until state support is repaid.
Thiele's backing will come as a relief to Chancellor Angela Merkel, who could ill afford another high-profile business collapse following the failure of payments firm Wirecard.
Germany's flagship airline, which traces its roots back almost a century, employs around 138,000 people and owns brands including Eurowings and Austrian Airlines.
It has been brought to its knees by Covid-19 and what promises to be a protracted travel slump, and like many rivals across the world, sought state help to stay afloat. Even after today's gains, its shares are down almost 40% this year.
Thiele had objected to the bailout terms and proposed an indirect government holding in Lufthansa via Germany's KfW development bank rather than a direct stake and board seats.
That sparked fears the bailout would fail and Lufthansa would have to seek protection from creditors within days.
Thiele said talks with the government on Monday had not removed his doubts: "Differences remain with government representatives," he told the newspaper.
But he said he could not have voted for insolvency, even though his investment would continue to be at risk.
He said he would continue to seek to influence the company's development in the future, although declining to say how.
Separately, Lufthansa struck a deal overnight with a union representing German flight attendants that is set to reap more than €500m in savings.
Up to 22,000 jobs could be at stake at the airline.
Ryanair will challenge the European Commission's approval of German rival Lufthansa's bailout, a senior Ryanair executive said today.
"It (Lufthansa) needs it as a war chest to fight off competition, it doesn't need it to survive," Juliusz Gomorek, Ryanair's chief legal officer told reporters.
Ryanair has already appealed to the Luxembourg-based General Court against aid granted by France, Denmark and Sweden to airlines and cleared by EU competition enforcers.