Commission authorizes Belgian aid worth €290 million to support #BrusselsAirlines in context of #Coronavirus pandemic

In the context of the coronavirus pandemic, the European Commission has authorized an aid measure of €290 million in favour of the SN group, which consists of SN Airholding and its sole subsidiary, Brussels Airlines. The aid was authorized under the Temporary State Aid Framework. Brussels Airlines is a leading airline whose main hub is located at Brussels International Airport.

Together with its parent company SN Airholding, it belongs to the SN group, itself 100% owned by Deutsche Lufthansa AG (DLH). Since the start of the coronavirus pandemic, Brussels Airlines and, more broadly, the SN group have suffered from the significant reduction in their services, which has resulted in an increase in operating losses and a significant shortage of liquidity. Belgium has notified the Commission, under the temporary framework, of a package of aid measures in favor of the SN group for an amount of €290m, which includes: (i) a loan at interest rate '' interest subsidized for a period of six years and for an amount of up to €287.1m, not convertible into equity, which can be used on request for minimum disbursements of €30m, and ( ii) a recapitalization of €2.9m in the form of “profit shares”, a hybrid instrument considered to constitute equity under Belgian accounting rules.

The Commission noted that the measure notified by Belgium complies with the conditions set in the temporary framework. The Commission has concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in accordance with Article 107 (3) (b) TFEU and the general principles set out in temporary supervision. On this basis, the Commission cleared the measure under EU state aid rules.

Competition Executive Vice-President Margrethe Vestager said: “Brussels Airlines plays an important role for jobs and connectivity in Belgium. This airline has suffered significant losses as a result of travel restrictions Belgium and other governments have had to impose to limit the spread of the virus.

"Thanks to this package of support measures of €290m, which essentially takes the form of a loan at subsidized interest rates, but which also includes a modest injection of equity, Belgium will provide the SN group, to which belongs to Brussels Airlines, the liquidity it urgently needs to withstand the repercussions of the current crisis. In addition, Belgium will be sufficiently remunerated for the risk borne by its taxpayers, and the aid will be accompanied by restrictions aimed at limiting distortions of competition."

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