Austrian secures €600mn bailout, eyes long-haul restart

Austrian Airlines (OS, Vienna) has secured a EUR600 million euro (USD678 million) bailout package backed by the Austrian government, commercial banks with state guarantees, and owner Lufthansa (LH, Frankfurt Int’l). The package consists of EUR150 million (USD169.5 million) injected directly by Lufthansa, a further EUR150 million injected by the Austrian government, and a EUR300 million (USD339 million) loan extended by a consortium of banks including Erste Group Bank, Raiffeisenbank International, and BAWAG, among others. Austria’s state-owned COVID-related fund COFAG will cover a guarantee covering 90% of the loan. The bailout is contingent on the finalisation of a EUR9 billion (USD9.9 billion) state aid package for Lufthansa itself. The German carrier’s shareholders will meet on June 25 to approve the conditions of the bailout. In return for its participation in the bailout, the government has imposed environmental conditions on Austrian Airlines wherein it will shift short-haul passenger traffic to rail travel where infrastructure permits and direct accessibility to Vienna Airport is ensured based on a travel time of “considerably” less than three hours. However, all regional airports in Austria will retain a connection to a Lufthansa hub.