The Belgian government and Lufthansa (LH, Frankfurt Int’l) have reportedly agreed, after months of back-and-forth, on the terms of a EUR460 million euro (USD bailout) for Brussels Airlines (SN, Brussels National), which do not include the state taking any stake in the carrier, public broadcaster VRT has reported.
According to the terms of the agreement, the Belgian government will loan the airline EUR290 million repayable by 2026. Lufthansa, for its part, committed to recapitalise its Belgian subsidiary with EUR170 million, of which EUR70 million will be earmarked for restructuring of the airline.
In return for its contribution to the rescue, the Belgian government secured a commitment by Lufthansa to keep Brussels National as one of its hubs and develop the airport. In addition, the German parent pledged to retain the brand of Brussels Airlines and its corporate headquarters in Belgium.
The deal still requires approvals by the full Belgian cabinet and the board of Lufthansa. It has yet to be made public.
The agreement was reached just days after the Belgian Finance Minister Alexander De Croo ramped up pressure on Lufthansa by saying that the stalemate concerning state aid for the airline was entirely due to the behaviour of the German holding, which had not been constructively engaging with the Belgian government.