Lufthansa subsidiaries to get vital financial injection
The German Economic Stabilization Fund (WSF) has approved financial support for German flag-carrier Lufthansa subsidiaries Brussels Airlines, Austrian Airlines and Swiss under the group‘s €9 billion rescue package from the government in Berlin.
As Brussels Airlines declares, the Belgian Federal Government, Lufthansa and the airline have reached an agreement securing the future of Belgium’s national carrier. Brussels Airlines’ financial aid package was settled on consisting of a €290 million loan from Belgian federal government and €170 million capital injection by Lufthansa.
This WSF financial support will allow Brussels Airlines to “implement its turnaround plan and herewith to create a long-term and structurally profitable future for the company“, the airline stated in a press release.
The stabilization package covers parts of the losses incurred by Brussels Airlines as a consequence of the COVID-19 crisis. At the same time, financial support secures tens of thousands of direct and indirect jobs that are linked to the activities of Brussels Airlines, the carrier states.
The European Union Commission revealed its approval of a financial support to cover coronavirus-related losses for Austrian Airlines, worth €600 million, which had been agreed on by Lufthansa and Austrian government earlier in June 2020.
Lufthansa-owned Austrian flag-carrier’s financial rescue package includes a €150 million capital injection from the Austrian government as well as a €150 million equity investment by its mother-company Lufthansa and repayable loans of €300 million from local banks.
A similar model of financial stabilization measures has been given to Swiss International Air Lines that during economic fall-out made an operating loss of €246 million in the first half of the year. Air carrier has been granted a €1.7 billion loan facility provided by local banks and assured by the Swiss government with an 85% loan guarantee.
“This support will enable Swiss to negotiate the present crisis, which has been caused by factors beyond our industry’s control, and to continue to gradually resume our flight operations”, said Thomas Kluhr, CEO of Swiss, in an airline’s press release.
According to the WSF report, under Lufthansa’s bailout, the German Economic Stabilization Fund has taken a 20% shareholding in Lufthansa Group.
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