Austrian Airlines, the flag-carrier of Austria, announced that it will be getting a sum of €600 million euros in financial aid due to COVID-19 pandemic. The aid package is comprised of €450 million euros coming from Austrian government and €150 million euros being given by its parent company, the Lufthansa Group.
Austrian government has issued €150 million euros in direct state aid, €300 million euros in loans to be paid back to banks by 2026 and other €150 million euros are coming as an equity injection by Austrian Airlines’ parent company, the Lufthansa Group. Previously the airline expected to need at least €767 million euros in aid to restart its operations, but due to ability to restart flights sooner Austrian decreased the needed amount to €600 million.
At the press conference, CEO of Lufthansa Group told, “Austrian Airlines has been and is a fundamental part of the multi-hub strategy pursued by Lufthansa Group. Thanks to this rescue package in combination with the 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.”
As a requirement to receive state aid, Austrian has to cut CO2 emissions by 30% when compared to 2005 levels and to increase jet fuel efficiency by 1.5% annually.
Austrian Government has also laid out a plan where traffic should use railways as a mean to travel if travel time does not exceed 3 hours.
The entire financial deal is not yet finalized as it is still a subject to Lufthansa (LHAB) (LHA) taking state aid from Germany and the approval from European Union Commission.