The German government and the management of flagship carrier Lufthansa, which has been hit hard by the coronavirus pandemic, have reached a preliminary deal on a 9 billion euro ($9.8 billion) bailout, two people close to the matter said.

The agreement is still pending approval by the German coronavirus rescue fund’s steering committee, which is expected to meet on Monday, as well as Lufthansa’s boards and the EU commission.

Lufthansa declined to comment. The German economy ministry said that negotiations were in their last phase but have not yet formally concluded.

Shares in the company were up 6.2 per cent at 8.56 euros by 6:00 pm.

The carrier said last week it was in advanced talks on a deal that would involve the government taking two seats on its supervisory board, but only exercising full voting rights in exceptional circumstances, such as to protect the firm against a takeover.

Lufthansa has been in talks with Berlin for weeks over aid to help it cope with what is expected to be a protracted travel slump, but has been wrangling over how much control to yield in return for support.

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