Announcement by Finance Minister Alexander De Croo on rescue deal for Brussels Airlines
Deputy Prime Minister and Finance Minister Alexander De Croo confirms that a draft agreement has been reached with Lufthansa Group and Brussels Airlines for the rescue of Brussels Airlines. Yesterday evening, the Minister explained the agreement reached to the federal inner cabinet.
The Finance Minister emphasises that the State aid, combined with the social partnership agreement and the new business plan, should lead to profitable growth for Brussels Airlines in the wake of the corona crisis. This is important not only for employment prospects, but also for the economic role of the airport cluster around Brussels Airport, Belgium’s second most important economic hub.
The draft agreement provides for a loan of 290 million euros granted by the Belgian State for a period of six years, in accordance with the rules laid down in the European Commission's Temporary Framework. The financial resources must remain within Brussels Airlines and may not be transferred to Lufthansa Group or other Lufthansa Group subsidiaries.
The loan is subject to a series of binding commitments. For example, the role of Brussels Airlines as hub carrier is confirmed and the Brussels Airlines brand must be retained. The head office will also remain in Brussels.
The agreement also provides for the expansion of the long-haul fleet on condition that the reorganisation is carried out as agreed with the social partners and profitability is as set out in the business plan. In order to have sufficient guarantees of repayment, the Belgian State has a pledge on the shares of Lufthansa Group in Brussels Airlines.
The draft agreement also confirms the importance of reducing the airline’s ecological footprint. This can be done, among other things, with fewer old aircraft and a more environmentally-friendly fleet.
In terms of governance, the draft agreement stipulates that the Belgian State is entitled to two representatives who sit on the Board of Directors of Brussels Airlines. In addition, a Strategic Committee will oversee the implementation of the agreements made. In the event of non-compliance with the arrangements, the agreement provides for an arbitration mechanism.
The draft agreement will be submitted to the European Commission in the next few days. Over the course of this month, the federal government, the Boards of Directors of Lufthansa Group and Brussels Airlines, as well as the German Economy Stabilization Fund will have to rubberstamp the agreement for it to go ahead.
Finally, the Minister wishes to express his thanks to the unions and management of Brussels Airlines. The efforts they have made to reach the previously reached social partnership agreement are considerable. The rescue deal of Brussels Airlines and the draft agreement on State aid give them long overdue transparency.