Brussels Airlines asks Belgian government for bail-out

Summary

After announcing that nearly one-quarter of its staff would need to be let go, Brussels Airlines and its parent company Lufthansa is meeting with federal ministers about a state investment

€290 million to start

Talks are continuing as the federal government, Brussels Airlines and Lufthansa seek to secure the future of Belgium’s national carrier. The CEO of the German parent company was in Brussels on Friday for negotiations.

Earlier this week, Brussels Airlines announced that it intended to make 1,000 of its 4,200 employees redundant and drastically reduce its operations as a result of the coronavirus crisis. Lufthansa CEO Carsten Spohr and Brussels Airlines CEO Dieter Vranckx met Belgian prime minister Sophie Wilmès, federal finance minister Alexander De Croo and federal employment minister Nathalie Muylle for talks on Friday.

Negotiations will continue in the coming days to agree on the form and conditions of any state investment. The government has indicated it will only provide funding if a series of exceptional conditions are met.

“There must be certainties built in to correctly implement a realistic and future-oriented business plan that is aimed at profitable growth, is ecologically responsible and that offers employment perspectives,” said the parties in a joint statement.

Both parties are committed to reaching a fruitful agreement in the interests of Brussels Airlines, its staff and the entire ecosystem around the airport

Brussels Airlines is asking in the first instance for €290 million in bridging loans to get through the crisis – an amount that may end up being significantly higher. In return for any financing, the government wants guarantees about the airline’s future and that of Brussels Airport at Zaventem, where Brussels Airlines represents 40% of air traffic.

“Talks have been difficult in recent weeks, even though progress has been made on the business plan,” read the statement. “Today’s meeting has given both sides the opportunity to further explain their respective positions and bring about a start of rapprochement. Both parties are firmly committed to reaching a fruitful agreement in the interests of Brussels Airlines, its staff and the entire ecosystem around the airport.”

According to VRT, unions are currently refusing to discuss the redundancy plan at their next meeting with management, which is scheduled for Monday. The proposals that are currently on the table, they said in a statement on Thursday, “are not serious, not realistic, not negotiable and even illegal”.

Brussels Airlines says in response that it “would never make illegal proposals”.

The airline suspended commercial flights on 21 March as a result of the coronavirus crisis. It plans to gradually restart its operations as of 15 June with a reduced schedule, taking into account international travel restrictions and demand for tickets. Flight staff will wear face masks and aircraft will undergo extra disinfection in an attempt to maximise safety.