Austrian Airlines to get 600-mln-euro rescue package

Agreement has been reached on a rescue package for Austrian Airlines to the tune of 600 million euros ($677 million) to mitigate the effects of the coronavirus pandemic, the government said on Monday.

Austria will provide 450 million euros, with the rest coming from German giant Lufthansa, of which Austrian Airlines is a subsidiary, Chancellor Sebastian Kurz said.

The Austrian government will guarantee 300 million euros in loans on top of a 150-million-euro grant, he added, confirming earlier media reports of the deal.

However, Austria is not expected to take a formal stake in the airline’s ownership, according to those reports.

Kurz said the airlines and the government had agreed to three goals: saving jobs, maintaining Vienna as a key hub and “necessary measures in terms of climate protection”.

Prominent politicians from the Green party, which governs with Kurz’s centre-right People’s Party (OeVP), had made clear in recent weeks that they wanted any deal to come with conditions to reduce the airline’s environmental impact.

The rescue deal will reportedly include targets for the airline to invest in more efficient technologies and thereby reduce its CO2 emissions and noise pollution.

Later this month, Lufthansa is to ask shareholders to back a nine-billion-euro bailout deal negotiated with the German government, which will take a 20-percent stake in the group under the agreement.

Austrian Airlines’ fleet has been largely grounded for almost three months due to the restrictions introduced to fight the new coronavirus pandemic, which have devastated the international travel industry.

The airline plans to restart flights from June 15 to several European destinations and Tel Aviv.

Some long-distance services will be restarted in July, including to New York, Washington and Bangkok.

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