Austrian Airlines has committed to cutting carbon emissions by half by 2030, with further reductions planned after that date, as part of a €600 million state aid package to support the carrier through the COVID 19 pandemic.
In line with French support the aid for the aviation sector also announced today (see story below) the mix of loan and grants to Austrian Airlines include environmental aims. The airline has committed that after 2030.CO₂ emissions will be reduced by a further 30 % a year until they reach 2005 levels.
The deal was struck between the Austrian Federal Government, Lufthansa and Austrian Airlines and is designed to support efforts to sustainably safeguard Vienna as an aviation hub in the long term, including its flight connections to Central and Eastern Europe and to long-haul destinations.
According to the Austrian Economic Chambers, €2.7 billion in domestic value creation, 17,500 jobs and €1 billion in taxes and duties are linked to Austrian Airlines and its Vienna flight hub.
The Republic of Austria will contribute €150 million in financial assistance to cover the losses incurred as a result of the COVID-19 crisis. In return, the Austrian Federal Government has received long-term, binding commitments to the Vienna aviation hub linked to strict ecological requirements. The entire financing package is dependent on state aid for Lufthansa in Germany, the approval of all corporate bodies and the consent of the EU Commission.
“Austrian Airlines has been and is a fundamental part of the multi-hub strategy pursued by Lufthansa Group. Thanks to this rescue package in combination with the improved framework conditions of the Austrian aviation system partners, we see ourselves in a position to rebuild the flight hub in Vienna after the crisis and connect Austria with important destinations in Europe and throughout the world”, said Carsten Spohr, Chief Executive Officer of Lufthansa Group.
Austrian Airlines originally reported liquidity requirements amounting to €767 million to the COVID-19 financing agency of the Austrian Federal Government (COVID19-Finanzierungsagentur des Bundes, or COFAG).
The earlier restart of flight operations and the successful implementation of measures by the airline’s management to secure liquidity serve as the basis for the lower amount of €600 million in required financing. This sum was also confirmed by the auditor PwC.
€300 million will be made available as loans granted via bank financing. Another €300 million provided as state aid and by Lufthansa will strengthen the airline’s equity capital. Not only is the repayment of the bank financing secured in this manner, but the ability to make medium-term investments in sustainable technologies will be ensured. In turn, this will safeguard the continued existence of Austrian Airlines as a systemically relevant partner for the Vienna aviation hub.
The bank loans totalling €300 million are to be made available by an Austrian banking consortium consisting of Erste Group, Raiffeisenbank International, BAWAG and possibly further banks, with the Erste Group also serving as the overall coordinator. A guarantee for 90 percent of the loans will be assumed by the Republic of Austria via COFAG after the required evaluation steps are carried out and all necessary approvals have been granted.
“I am relieved and thankful that we have succeeded together in making Austrian Airlines ready for take-off again”, says Austrian Airlines chief executive Alexis von Hoensbroech. “After almost three months on the ground, Austrian Airlines will lift off again and slowly ramp up its flight operations in accordance with international travel guidelines. We look forward to soon welcoming passengers on board our flights once again”, he adds.