On Monday, 6 July, the European Commission approved a subordinated loan (convertible into a grant) from the Austrian authorities to Austrian Airlines AG, a company belonging to the Lufthansa Group, in order to partially compensate for the travel restrictions imposed by the coronavirus pandemic between 9 March and 14 June 2020.
Granted so as to cope with an exceptional occurrence within the meaning of Article 107(2b) of the TFEU, the support will take the form of a €150 million subordinated loan—i.e., an amount less than that of the estimated damage directly caused to the airline during the period in question.
It will be converted into a grant only after (and to the extent that) Austrian Airlines’s financial statements for the financial year 2020, audited by an independent external audit firm, have confirmed that the aid does not exceed the amount of the damage suffered during the period that the fleet was grounded.
Any public aid received by Austrian Airlines in excess of the actual damage suffered will have to be returned to Austria. The risk of overcompensation is thus excluded.
In order to assess the proportionality of the measure, the Commission also took into account other measures granted to Austrian Airlines under the Temporary Framework and Article 107(3b) TFEU: a contribution of €150 million in equity from its indirect shareholder Deutsche Lufthansa AG, which can be drawn from the €6 billion recapitalisation measure that Germany granted the airline and that was authorised by the Commission on 25 June (see EUROPE 12514/6), and a €300 million loan granted by a consortium of commercial banks.
Separate from the approved measure, these measures are aimed at restoring Austrian Airlines’s capital structure so as to ensure that the company has sufficient liquidity to continue its activities during and after the current crisis and to ensure its viability. They are not intended to compensate or cover damage (losses) suffered by the Austrian airline as a direct result of the travel restrictions and containment measures. (Original version in French by Lionel Changeur)