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€290 million rescue package for Brussels Airlines

22:29 21/07/2020

Brussels Airlines is set to receive a €290 million rescue package from the Belgian federal government, after a provisional deal was reached on Tuesday.

The draft agreement comes after several months of negotiations with the airline's parent company, German carrier Lufthansa, amid the coronavirus crisis.

Belgium will lend the airline €290 million, repayable within six years, in return for several guarantees from Lufthansa.

The money must remain within the Belgian airline and not be transferred to the parent company. Lufthansa must preserve the Brussels Airlines brand, and the airline's headquarters and decision making will remain in the Belgian capital, with Lufthansa committing to develop Brussels Airport as an international hub.

Lufthansa has also committed to invest in personnel, expand the airline's long-haul network and work towards climate goals. The Belgian government will have two seats on the Brussels Airlines board of directors.

The draft agreement will need approval from the Belgian and German governments, Lufthansa management and the European Commission.

Brussels Airlines has been facing dire cashflow problems since the coronavirus shutdown in March - and the airline has been slow to refund passengers for cancelled flights.

The crisis prompted Lufthansa to accelerate its restructuring plan for the airline, scrapping destinations from its schedule and announcing plans to axe 1,000 jobs.

Written by The Bulletin