Commission approves €150 million Austrian subordinated loan to compensate #AustrianAirlines for damages suffered due to #Coronavirus outbreak

| July 8, 2020

The European Commission has found an Austrian €150 million subordinated loan (convertible into a grant) in favour of Austrian Airlines AG to be in line with EU state aid rules. The measure aims at partly compensating the airline for the damages suffered due to the coronavirus outbreak. Austrian Airlines, which is part of the Lufthansa Group, is a major network airline operating in Austria. With a fleet of over 82 planes, Austrian Airlines served 130 destinations all over the world in 2019, carrying about 14.7 million passengers from its main hub, Vienna, and other airports to various international destinations.

Since the start of the coronavirus outbreak, Austrian Airlines has suffered a significant reduction of its services, resulting in high operating losses. Austria notified to the Commission an aid measure to partly compensate Austrian Airlines for the damage suffered from 9 March 2020 to 14 June 2020 resulting from the containment measures and travel restrictions introduced by Austria and other destination countries to limit the spread of the coronavirus. The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve state aid measures granted by Member States to compensate specific companies or sectors for damage directly caused by exceptional occurrences. The Commission considers that the coronavirus outbreak qualifies as such an exceptional occurrence, as it is an extraordinary, unforeseeable event having significant economic impact.

As a result, exceptional interventions by the member state to compensate for the damages linked to the outbreak are justified. On this basis, the Commission concluded that the Austrian damage compensation measure is in line with EU state aid rules. Executive Vice President Margrethe Vestager, in charge of competition policy, said: “The €150 million public support measure will enable Austria to partly compensate Austrian Airlines for the damage it directly suffered due to the travel restrictions implemented to limit the spread of the coronavirus. The aviation sector has been hit particularly hard by the coronavirus outbreak. We continue working with member states to discuss possibilities and find workable solutions to preserve this important part of the economy in line with EU rules.”

The full press release is available online.

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Category: A Frontpage, Austria, Aviation/airlines, Business, coronavirus, Coronavirus face masks, Coronavirus Global Response, COVID-19, EU, EU, European Commission, Health, PPE, State aid, World

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