EC approves Brussels Airlines, Blue Air state aid

The European Commission has approved state aid packages granted to each of Brussels Airlines (SN, Brussels National) and Blue Air (Romania) (0B, Bucharest Otopeni) by their respective governments. The Belgian flag carrier has been okayed to receive EUR300 million euros (USD354 million) from the Belgian government, including EUR297.1 million as a six-year low-interest loan not convertible into equity and EUR2.9 million as fresh capital in the form of profit sharing certificates. The two measures will be disbursed as a part of broader state aid to parent Lufthansa (LH, Frankfurt Int’l) and will proportionately reduce the size of loans and fresh capital granted to the German airline. Lufthansa’s overall package, including its wholly-owned subsidiaries, involves a EUR3 billion (USD3.5 billion) state-guaranteed loan and EUR6 billion (USD7.1 billion) in recapitalisation. In turn, the privately-owned Romanian carrier was cleared to receive EUR62 million (USD73.1 million) in state aid from the Romanian government. The Commission pointed out that Blue Air qualified as a “company in difficulty” prior to the outbreak of the COVID-19 pandemic as it had been loss-making between 2016 and 2018 but only returned to profitability in 2019 and early 2020. The measure, granted in the form of state guarantees, is split between EUR28 million (USD33 million) compensating Blue Air for losses suffered directly as a result of the pandemic and EUR34 million (USD40 million) which will provide additional liquidity to help it operate in a higher-cost, lower-demand environment. Routes Online has reported that, having received the clearance of the aid package, Blue Air now plans to expand its Italian and Romanian networks in the coming months. The airline will grow its bases at Turin and Bacau to two and three aircraft, respectively, adding one unit at each of them. Out of Turin, Blue Air will focus on adding new routes within Italy and increasing frequencies on the existing ones. In turn, out of Bacau, it plans to add both domestic and international services. Both bases will expand in September. Bacau airport is currently closed for modernisation and plans to reopen by the end of September. Blue Air also plans to expand its network from Bucharest Otopeni, although not before March 2021.