April 27, 2020 / 8:46 AM / a month ago

Lufthansa, Air France-KLM shares rise on bailout progress

FILE PHOTO: Logo of Air France KLM Group is pictured on the first Air France airliner's Airbus A350 during a ceremony at the aircraft builder's headquarters of Airbus in Colomiers near Toulouse, France, September 27, 2019. REUTERS/Regis Duvignau

PARIS (Reuters) - Shares in Air France-KLM (AIRF.PA) and Lufthansa LHAG.CE led European stock market gains on Monday on hopes that government bailouts would see them through the coronavirus crisis.

Lufthansa was up 7% in Frankfurt after a German minister said it would need to be supported, while Air France-KLM was 3.5% higher at 0829 GMT as investors digested a 7 billion euro ($7.6 billion) French state loan package announced late on Friday.

Lufthansa, which warned last week it had cash to survive just weeks unaided amid a global air travel shutdown, is in talks over a state aid package worth about 10 billion euros, sources have said.

On Monday German Transport Minister Andreas Scheuer said he backed support for the carrier.

Announcing the Air France-KLM loans, with another 2-4 billion euros to follow from the Dutch government, the Franco-Dutch group said it expected to raise new equity in the next year, with France likely to participate.

Paris is also preparing to guarantee another 5 billion euros in loans to Renault (RENA.PA), Finance Minister Bruno Le Maire said. Shares in the French carmaker were up 7.5% in Paris, leading a 1.6% gain for the benchmark CAC-40 index.

Reporting by Laurence Frost; Editing by Jan Harvey

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