Austrian Airlines: Austria package to secure Vienna as an operating centre and air transport hub and Austrian Airlines as a brand
Finance Minister Blümel: Securing the future of Austrian Airlines will support Austria as a centre of economic activity and ensure the growth of Vienna as an air transport hub through a formal agreement
"Securing the future of Austrian Airlines is a measure to support Austria as a centre of economic activity. Austrian Airlines is our gateway to the world, with around 130 destinations and almost 20 long-haul routes, and around 17,500 jobs depending either directly or indirectly on the airline company. This also means that securing the future of Austrian constitutes a support measure around many of the issues which we have been discussing intensively over the past few weeks, whether in connection with city tourism, the municipal hotel business, the hospitality industry, conference tourism, or trade fairs. All of these can only come back to pre-crisis levels if the future of Austrian Airlines is also secured, plus, last but not least, Vienna can only remain the official headquarters of international organisations over the medium and long term if the airline also remains our gateway to the world," explained Finance Minister Gernot Blümel at today's Austrian Airlines press conference. "And for this reason, it is a good thing that we are able to jointly announce this Austria package today."
On the financing side, Austria will be providing EUR 150 million in grants, while in return, Austrian's proprietor, Lufthansa, will give the company the same amount, also EUR 150 million, and will thus be making a huge commitment to its subsidiary. A banking consortium will provide liquidity of EUR 300 million in external capital, and this loan will be backed by a 90% government guarantee. If it cannot be repaid, security measures have also been built in, such that the airline would then de facto fall into Austrian state ownership. In return, the Republic of Austria will receive comprehensive operating location guarantees and investment commitments for ten years. The most important element of the package will therefore consist in securing Austria as an operating centre and hub for ten years, with EUR 150 million in investment commitments lasting until 2030, the principal focus being on climate-efficient technologies - in particular for the fleet itself - proportional growth of Vienna as a hub compared with Lufthansa's other hubs as an equally-important pillar of the contract, plus the so-called ramp-up, i.e. the resumption of flights taking place in proportion to other hubs. The key elements of the operating centre agreement will also be backed by a penalty clause, i.e. in the event of non-fulfilment, a fine will be payable by the defaulting party. The whole arrangement will be verified and overseen using a corporate governance mechanism, with a supervisory board appointment at Austrian Airlines and two seats on the foundation board.