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 International).
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.
Also, Austrian Airlines will have to halve its domestic emissions by 2030, reducing them by 30% compared to 2005 levels on a global scale, increase jet fuel efficiency by 1.5% annually, and lower average CO₂ emissions for the entire Austrian Airlines fleet from 9.55 kg to 8.5 kg per 100 passenger-kilometres by 2030.
Besides providing capital, Lufthansa pledged to retain Vienna as one of its core long-haul hubs.
Austrian Airlines said that a further EUR300 million in savings would come from salary cuts and another EUR150 million through renunciations and renegotiations of supplier contracts.
The airline initially requested EUR767 million (USD866.5 million) in aid but was able to trim the amount partially due to earlier restart of flights and better than expected demand, "considering the circumstances". The carrier will resume limited European operations on June 15 with long-haul flights to Bangkok Suvarnabhumi, Chicago O'Hare, New York Newark, and Washington Dulles to restart on July 1.
