Belgium’s flag carrier Brussels Airlines that was born from the wreckage of Sabena will receive a €290M rescue package from the country’s federal government.
Brussels Airlines is part of Lufthansa Group airlines of Lufthansa, Swiss, and Austrian (+ smaller feeders). The other airlines have already received similar packages from the respective German, Swiss, and Austrian governments.
You can access Brussels Airlines here.
Here’s an excerpt from the Bulletin:
Belgium will lend the airline €290 million, repayable within six years, in return for several guarantees from Lufthansa.
The money must remain within the Belgian airline and not be transferred to the parent company. Lufthansa must preserve the Brussels Airlines brand, and the airline’s headquarters and decision making will remain in the Belgian capital, with Lufthansa committing to develop Brussels Airport as an international hub.
Lufthansa has also committed to invest in personnel, expand the airline’s long-haul network and work towards climate goals. The Belgian government will have two seats on the Brussels Airlines board of directors.
I am not entirely convinced that the right way to bail out all these airlines is to load them up with more debt than what they can repay. It is challenging to see air traffic significantly to pick up before 2022, and it will take three to five years to get to the same level of activity we had back in December.
Perhaps this is merely a way to help airlines such as Brussels to survive the first part of this shock, and let the future governments or investors deal with the debt mountain later?