State aid: European Commission approves €290 million Belgian support to Brussels Airlines in the context of the coronavirus outbreak


On July 24th, Brussels Airlines announced that it had reached an agreement with the Belgian Federal Government and Lufthansa to secure the future of Belgium’s home carrier and herewith the long-term development of the airline through a stabilisation package. On August 17, the package was approved by the German Economic Stabilisation Fund (WSF). Today the EU Commission has also given its approval.

The stabilisation package of 460 million euro – €290 million from the Belgian Federal government and €170 million from Lufthansa – covers in part the losses incurred by Brussels Airlines due to the crisis and secures at the same time tens of thousands of direct and indirect jobs that are linked to the activities of Brussels Airlines. Thanks to the package, the airline can finance its turnaround plan and herewith create a long-term and structurally profitable future.

Dieter Vranckx, CEO of Brussels Airlines said: “With this news, we finally conclude the three pillars of our survival and long-term competitiveness. We are relieved that the execution of the financial transaction can take place. We will now shift all our focus towards a timely implementation of our turnaround plan Reboot Plus. Thanks to the support and trust we receive from our shareholder Lufthansa, the Belgian government and from all our employees, we can create a strong and competitive Brussels Airlines with long-term perspectives, an important engine for the Belgian economy. For that, I sincerely thank all involved parties.

State aid: Commission approves €290 million Belgian support to Brussels Airlines in the context of the coronavirus outbreak

The European Commission has approved a €290 million Belgian aid measure to support SN Group, which is composed of SN Airholding and its sole subsidiary Brussels Airlines, in the context of the coronavirus outbreak. The aid measure consists of a €287 million loan and an equity injection of around €3 million. The aid measure was approved under the State aid Temporary Framework.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Brussels Airlines plays an important role in terms of jobs and connectivity in Belgium. The airline has been suffering substantial losses as a result of the travel restrictions that Belgium and other governments had to impose to limit the spread of the virus. With this €290 million support package, which mostly takes the form of a loan with subsidised interest rates, but also includes a minor equity injection, Belgium will provide SN Group, to which Brussels Airlines belongs, with the liquidity that it urgently needs to withstand the impact of the current crisis. At the same time, Belgium will be sufficiently remunerated for the risk taxpayers assume, and the support will come with strings attached to limit distortions of competition.”

Brussels Airlines is a major network airline with its main hub at Brussels International Airport. Together with its parent company SN Airholding, Brussels Airlines belongs to SN Group, which in turn is fully owned by Deutsche Lufthansa AG (DLH). Since the start of the coronavirus outbreak, Brussels Airlines, and more generally SN Group, have suffered a significant reduction of their services, resulting in high operating losses and a significant liquidity shortage.

Belgium notified to the Commission under the Temporary Framework a €290 million aid package in favour of SN Group, comprising:

  • a 6-year loan of up to €287.1 million with subsidised interest, not convertible into equity, that may be drawn down in disbursements of minimum €30 million upon request; and
  • a recapitalisation of €2.9 million in the form of “profit-sharing certificates” (“parts bénéficiaires” / “winstaandelen”), a hybrid instrument that qualifies as equity under Belgian accounting rules.

The measure is part of a larger support package granted by Germany to the entire Lufthansa Group, to which SN Group belongs. As a result of the Belgian support measure, the overall aid previously granted to the Lufthansa Group will be proportionally reduced. Notably, the loan will proportionally reduce the State guaranteed loan granted to DLH as individual aid by Germany under the scheme approved by the Commission decision of 22 March 2020 (SA.56714). The amount of the recapitalisation will proportionally reduce the recapitalisation of DLH approved by the Commission decision of 25 June 2020 (SA.57153).

The Commission found that the aid measure notified by Belgium is in line with Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU) and the conditions set out in the Temporary Framework. In particular,

  • With respect to the loan with subsidised interest rates, the Commission found that: (i) the amount is linked to SN’s Group liquidity needs in the foreseeable future and does not exceed double the annual wage bill of SN Group; (ii) the interest rates applicable to the loan fully comply with the reference rates and credit risk margins laid down in the Temporary Framework; and (iii) the loan is limited to a six-year duration.
  • With respect to the recapitalisation, the Commission found that: (i) the amount does not exceed the minimum needed to ensure SN Group’s viability and does not go beyond restoring its capital structure before the coronavirus outbreak; (ii) the State will receive an appropriate remuneration for the investment; (iii) the investment includes enough exit incentives for the company to redeem the aid as soon as possible; (iv) until full redemption of the recapitalisation, SN Group is subject to a dividend ban; and (v) until at least 75% of the recapitalisation is redeemed, a strict limitation of the remuneration of the management (“membre de la direction des bénéficiaires” / “management van de begunstigden”), including a ban on bonus payments, is applied, and SN Group is in principle prevented from acquiring a stake of more than 10% in competitors or other operators in the same line of business. SN Group will have to publish information on the use of the aid received, including on how the use of the aid received supports its activities in line with EU and national obligations linked to the green and digital transformation.

The Commission concluded that the aid measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the general principles as set out in the Temporary Framework.

On this basis, the Commission approved the measure under EU State aid rules.


The Commission has adopted a Temporary Framework to enable Member States to use the full flexibility foreseen under State aid rules to support the economy in the context of the coronavirus outbreak. The Temporary Framework, as amended on 3 April8 May and 29 June 2020, provides for the following types of aid, which can be granted by Member States:

(i) Direct grants, equity injections, selective tax advantages and advance payments of up to €100,000 to a company active in the primary agricultural sector, €120,000 to a company active in the fishery and aquaculture sector and €800,000 to a company active in all other sectors to address its urgent liquidity needs. Member States can also give, up to the nominal value of €800,000 per company zero-interest loans or guarantees on loans covering 100% of the risk, except in the primary agriculture sector and in the fishery and aquaculture sector, where the limits of €100,000 and €120,000 per company respectively, apply.

(ii) State guarantees for loans taken by companies to ensure banks keep providing loans to the customers who need them. These state guarantees can cover up to 90% of risk on loans to help businesses cover immediate working capital and investment needs.

(iii) Subsidised public loans to companies (senior and subordinated debt) with favourable interest rates to companies. These loans can help businesses cover immediate working capital and investment needs.

(iv) Safeguards for banks that channel State aid to the real economy that such aid is considered as direct aid to the banks’ customers, not to the banks themselves, and gives guidance on how to ensure minimal distortion of competition between banks.

(v) Public short-term export credit insurance for all countries, without the need for the Member State in question to demonstrate that the respective country is temporarily “non-marketable”.

(vi)   Support for coronavirus related research and development (R&D) to address the current health crisis in the form of direct grants, repayable advances or tax advantages. A bonus may be granted for cross-border cooperation projects between Member States.

(vii)  Support for the construction and upscaling of testing facilities to develop and test products (including vaccines, ventilators and protective clothing) useful to tackle the coronavirus outbreak, up to first industrial deployment. This can take the form of direct grants, tax advantages, repayable advances and no-loss guarantees. Companies may benefit from a bonus when their investment is supported by more than one Member State and when the investment is concluded within two months after the granting of the aid.

(viii)  Support for the production of products relevant to tackle the coronavirus outbreak in the form of direct grants, tax advantages, repayable advances and no-loss guarantees. Companies may benefit from a bonus when their investment is supported by more than one Member State and when the investment is concluded within two months after the granting of the aid.

(ix) Targeted support in the form of deferral of tax payments and/or suspensions of social security contributions for those sectors, regions or for types of companies that are hit the hardest by the outbreak.

(x) Targeted support in the form of wage subsidies for employees for those companies in sectors or regions that have suffered most from the coronavirus outbreak, and would otherwise have had to lay off personnel.

(xi) Targeted recapitalisation aid to non-financial companies, if no other appropriate solution is available. Safeguards are in place to avoid undue distortions of competition in the Single Market: conditions on the necessity, appropriateness and size of intervention; conditions on the State’s entry in the capital of companies and remuneration; conditions regarding the exit of the State from the capital of the companies concerned; conditions regarding governance including dividend ban and remuneration caps for senior management; prohibition of cross-subsidisation and acquisition ban and additional measures to limit competition distortions; transparency and reporting requirements. Recapitalisations above the threshold of €250 million are subject to separate notification and, if they benefit companies with significant market power on at least one of the relevant markets in which they operate, Member States must propose additional measures to preserve effective competition in those markets, in the form of structural or behavioural commitments.

The Temporary Framework enables Member States to combine all support measures with each other, except for loans and guarantees for the same loan and exceeding the thresholds foreseen by the Temporary Framework. It also enables Member States to combine all support measures granted under the Temporary Framework with existing possibilities to grant de minimis to a company of up to €25,000 over three fiscal years for companies active in the primary agricultural sector, €30,000 over three fiscal years for companies active in the fishery and aquaculture sector and €200,000 over three fiscal years for companies active in all other sectors. At the same time, Member States have to commit to avoid undue cumulation of support measures for the same companies to limit support to meet their actual needs.

Furthermore, the Temporary Framework complements the many other possibilities already available to Member States to mitigate the socio-economic impact of the coronavirus outbreak, in line with EU State aid rules. On 13 March 2020, the Commission adopted a Communication on a Coordinated economic response to the COVID-19 outbreak setting out these possibilities. For example, Member States can make generally applicable changes in favour of businesses (e.g. deferring taxes, or subsidising short-time work across all sectors), which fall outside State Aid rules. They can also grant compensation to companies for damage suffered due to and directly caused by the coronavirus outbreak.

The Temporary Framework will be in place until the end of December 2020. As solvency issues may materialise only at a later stage as this crisis evolves, for recapitalisation measures only the Commission has extended this period until the end of June 2021. With a view to ensuring legal certainty, the Commission will assess before those dates if it needs to be extended.

The non-confidential version of the decision will be made available under the case number SA.57544 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

More information on the Temporary Framework and other action the Commission has taken to address the economic impact of the coronavirus pandemic can be found here.




Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.