The €460 million aid package for Brussels Airlines agreed with the German government has been approved by both Brussels Airlines and its parent company Lufthansa. A spokeswoman for Brussels Airlines confirmed this.
Earlier this week, the German government and Lufthansa agreed on financial support for Brussels Airlines. Finance Minister Alexander De Croo (Open Vld) has already explained the broad outlines of the past few days. For example, the Belgian state will provide a loan of EUR 290 million, while Lufthansa will invest EUR 170 million in its subsidiary.
But neither the Belgian airline nor its parent company has yet to officially confirm the deal. The agreement was approved internally. That has now happened.
“We are pleased that the German government, Lufthansa and Brussels Airlines have agreed on a stabilization package to deal with the Corona crisis,” Dieter Vranckx, CEO of Brussels Airlines, said in a video message on the microblog site Twitter. “This was the last missing piece of the puzzle for us to create a profitable future for Brussels Airlines.”
The agreement has not yet been fully overturned. The agreements have yet to be approved by the German Economic Stabilisation Fund (WSF) and the European Commission.
In return for the six-year loan, Lufthansa promises, among other things, that the Brussels Airlines brand name will be retained, that its headquarters will remain in Belgium and that the airline will continue to operate under a Belgian license (AOC). Brussels Airport will also be expanded as a hub. The state also has two seats on the Brussels Airlines Board of Directors.
Lufthansa, which has invested more than 600 million euros in its Belgian subsidiary in recent years, is pumping another 170 million euros, according to Vranckx. About 70 million of these will be used for the announced restructuring. In addition, the fleet will be reduced by a third, about 1,000 of the 4,000 jobs will be lost and the remaining workers will have to give up.
The airline had to suspend its commercial flights on March 21 due to the Corona crisis. Since 15 June, activities have resumed, albeit on the opposite legs. Recently, it had to postpone the planned extension of the flight schedule from the beginning of August because the money was running out. The agreement would limit this delay to a maximum of one week. “The crisis has affected the travel plans of almost 3 million of our customers,” says Dieter Vranckx.
“The stabilization measures will enable Brussels Airlines to overcome the current crisis and continue to fly flights in order to generate sufficient funds to repay the loan,” Brussels Airlines said in the press release.