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Support from European states already closed to airlines exceeds 25 billion euros, with the highest amounts being due to Lufthansa and Air France, according to Fitch Ratings’ accounts.
In an article published on its website, dated June 30, the rating agency compiled the amounts already approved for carriers, including a state injection of up to 1.2 billion euros to be applied in TAP, a loan outside the sphere of support due to the impact of the Covid-19 pandemic, since the company was already in a weak financial position before the outbreak.
Fitch concluded that, since March, European airlines have received more than 25 billion euros in direct support to liquidity, of which almost 19 billion euros correspond to targeted measures, approved directly by the European Commission (EC).
On 25 June, the EC approved state aid from Germany to the Lufthansa airline, for a total of € 9 billion. The approval comes after Lufthansa and the German government reached an agreement on an aid plan, with the state becoming the largest shareholder in the group, with 20% of the capital. This amount, according to Fitch, is divided between 6 billion euros from a German Economic Stabilization Fund and 3 billion euros from State guarantees.
Lufthansa, which owns Austrian Airlines, also injected 150 million euros into the Austrian company, which also saw a loan of 300 million euros approved, 90% guaranteed by the state. Germany finally approved a loan guaranteed by the German State of 550 million euros to Condor and a guarantee of 1.8 billion euros to Tui.
For its part, the French government announced a total of € 15 billion in aid to the aeronautical industry affected by a new coronavirus, including the aircraft manufacturer Airbus and the national airline Air France, with the carrier being entitled to an amount of 7 thousand euros. millions of euros. The amount allocated to Air France includes 90% of State guarantees for a loan of 4 billion euros and a further 3 billion euros granted by the French State, as shareholder of the carrier.
Fitch also reports Finnair’s aid of € 286 million in contributions to recapitalize the airline and € 600 million in guarantees for a loan granted to the group.
SAS – Scandinavian Airlines System, a multinational carrier, from Sweden, Norway and Denmark, has guarantees from both Sweden and Denmark for two loans of 137 million euros. The Swedish government also saw a guarantee scheme approved for air carriers with a commercial aviation license from the country, worth 455 million euros.
Fitch Ratings has also compiled several other public and central bank support initiatives for airlines. Among them, Bank of England measures to support British Airways and Ryanair stand out. In the first case, the institution bought in May 331 million euros in commercial paper, less than the 663 million euros of similar purchases in the low cost airline.
The Bank of England used the same instrument as part of a support program to combat the impact of Covid-19, on easyJet (663 million euros) and on Wizz Air (331 million euros). Spain has also chosen, for now, to grant 750 million euros in guarantees to Iberia and 260 million euros to Vueling, through the Instituto de Credito Oficial, a kind of Spanish development bank.
Norway, in the case of Norwegian Air Shuttle, opted to convert debt into equity, thus enabling access to a State guarantee of close to 280 million euros, according to Fitch.
The Greek Aegean Airlines was the target of a guarantee of 150 million euros from a fund in Greece to support companies harmed by Covid-19 and in Latvia Air Baltic approved an injection of 250 million euros in capital, increasing the position of the 91%, compared to the 80% it held.