The Belgian government and airline Lufthansa (LHAB) (LHA) have reached an agreement on the rescue of Brussels Airlines. A state-loan of €290 million should be granted by Belgium, while the German group will provide €170 million.
On July 21, 2020, both parties finally reached a deal concerning the rescue of Brussels Airlines, according to local media reports. The agreement symbolically reached on Belgium’s National Day, put an end to four months of intense negotiations.
The agreement, which is yet to be signed, will see Lufthansa (LHAB) (LHA) receive €290 million from the Belgium state, to be paid back before mid-2026. In return, the German parent will invest €170 million in the restructuring and recapitalization of the Belgian carrier. The loan should be tied by guarantees, as Minister of Finance Alexander De Croo recently reminded. “We are not naive, this is a foreign company with a Belgian activity,” De Croo said in a parliamentary session.
The restructuring plan presented by Brussels Airlines includes a revision of the network to cut the marginally profitable and unprofitable routes ‒ about 22. This will allow a reduction of the fleet to 38 aircraft, from the current 54. The drop in capacity will consequently be accompanied by a cut of a quarter of the workforce (1,000 out of 4,000 jobs).