Austrian Airlines Receives €600 Million Financial Aid Package From Federal Government and Lufthansa
Austrian Airlines announced on Monday that they have received financial aid from the Federal Government and Lufthansa, as well as loans totaling €600 million. The financial assistance will safeguard the carrier’s Vienna hub as well as European and International connections.
Yesterday (June 8, 2020), Austrian Airlines announced that they have received a financial aid package worth €600 million form the Austrian Federal Government, Lufthansa and bank loans. The funding will allow the carrier to maintain and defend their Vienna hub as well as maintain international and Central and Eastern European (CEE) connectivity. As evaluated by the Austrian Economic Chambers, the carrier contributes €2.7 billion in domestic economic value, €1 billion in taxes and 17,500 jobs to the Austrian economy. The Republic of Austria will contribute €150 million to cover COVID-19 related economic losses, while Lufthansa will inject an additional €150 million in equity capital. Additionally, the carrier has secured €300 million in bank loans to be repaid by 2026. The total aid package is dependent on the state aid for Lufthansa in Germany and the approval of all stakeholders including the EU commission. In Monday’s announcement, Lufthansa Group’s Chief Executive Officer, Carsten Spohr said,
“Austrian Airlines has been a fundamental part of the multi-hub strategy pursued by Lufthansa Group. Thanks to this rescue package in combination with improved framework conditions of the Austrian aviation system partners, we see ourselves in a position to rebuild the flight hub in Vienna after the crisis and connect Austria with important destinations in Europe and throughout the world.”
Also commenting on Monday’s announcement, Austrian Airlines’ CEO, Alexis Von Hoensbroech added,
“I am relieved and thankful that we have succeeded together in making Austrian Airlines ready for takeoff again. After almost three months on the ground, Austrian Airlines will lift off again and slowly ramp up its operations in accordance with international travel guidelines. We look forward to soon welcoming passengers onboard our flights once again.”
The €300 million bank loan portion of the aid package was funded by an Austrian banking consortium consisting of the Erste Group. Raiffeisenbank International and BAWAG with the Erste Group serving as coordinator. The loans will be 90 percent guaranteed by the Austrian Federal Government’s ‘COVID-19-Finanzierungsagentur des Bundes GmbH’ (COFAG) program once all steps are carried out and approvals are granted. Austrian Airlines’ nearly 7,000 team members are also making a substantial contribution to the airline’s future by taking salary cuts of about €300 million. Additionally, over 1,000 suppliers and business partners of the carrier will make substantial contributions through various cost and contractual adjustment measures.
Source: Austrian Airlines