In exchange for state aid to Brussels Airlines, the Belgian federal government asks its 100% shareholder Lufthansa for hard guarantees about the future of the Belgian airline.
Since weeks it has been said that Brussels Airlines will be running out of cash in mid-May if the federal government does not provide € 290 million (a bridge loan of 200 million and 90 million for recapitalisation) to survive the coronavirus crisis.
Prime Minister Sophie Wilmès sent a letter to Lufthansa CEO Carsten Spohr on Wednesday, which financial newspaper De Tijd was able to see.
According to the government, Brussels Airlines’ best guarantee for a bright future is within the Lufthansa group. But, in exchange for state aid, Wilmès demands with strong words a detailed growth perspective for Brussels Airlines at its Brussels Airport hub and additional investments in Brussels Airlines. Lufthansa must also take employment and ecology into account.
The government has asked the management of Brussels Airlines to present a clear business plan for the period 2020-2025 based not only on the inevitable short-term restructuring but also including quantifiable goals for the development of Brussels Airport as a long-term hub.
The Belgian government has little faith in German promises and reminds the planned integration of Brussels Airlines into Eurowings, which was met with a lot of scepticism in Belgium before being abandoned by Lufthansa.
Therefore, Sophie Wilmès and Finance Minister Alexander De Croo are aiming for a system whereby they can enforce Lufthansa’s commitments, for example through the Belgian state becoming a shareholder of the Brussels Airlines with the right of veto on items like fleet development and destinations.
But Spohr wants to avoid political interference, just like with Germany where the Government wants a 25.1% stake in the capital of Lufthansa, Austria and Switzerland; he wants free hands to lead the Lufthansa Group as he decides.
Negotiations will be hard, but Spohr might threaten with insolvency (like in Germany again).
This post was published on 2 May 2020 16:17
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