Belgium and Lufthansa agree rescue for Brussels Airlines

The Belgian authorities have struck a deal with Brussels Airlines and its parent company Lufthansa of Germany with regard to the rescue of the Belgian flag carrier. The deal still needs to be endorsed by the cabinet, but if this happens the ailing airline will receive a 290 million euro loan in return for strong guarantees for the airline’s future in Belgium.

Brussels Airlines has been hit by the corona crisis.  Talks between the Belgian government and its parent company were making little headway and here preparations were ready for a ‘No Deal’. But a deal has now materialised and this will now be put to the Lufthansa board.  The European commission too must wave it through.

Due to the corona crisis all planes were on the ground for 3 months and most of the company’s 4,000 staff had to sign on. Financial woes meant the company had to delay the resumption of some activities in August.

Brussels Airlines will have to repay the loan by 2026.  Lufthansa is also committed to injecting 170 million euros. 70 million euros will be spent on restructuring, the rest on financial consolidation.

The Belgian government insisted on strict conditions anchoring the company in Belgium and guaranteeing its future.  The airline is now wholly German-owned.

The agreement guarantees the survival of the brand ‘Brussels Airlines’.  The company’s HQ and decision-making centre remain in Brussels.  The company will continue to fly under a Belgian licence. Lufthansa has guaranteed to invest in operations at Brussels Airport.

Brussels Airlines had planned to cut a quarter of its workforce, 1,000 jobs, but talks with the unions reduced redundancies to under 351. The new deal includes commitments by Lufthansa to invest in staff and fleet expansion in Brussels and the company’s wider network. New planes will have to be more ecological. The Belgian government will appoint two members of the Brussels Airlines board to ensure compliance. If Lufthansa fails to stick to its commitments sanctions loom. 

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