The Spanish government approved a cash injection of EUR 475 millions to Air Europa, granted through the SEPI-Sociedad Española de Participaciones Industriales, the state arm on public companies that also has the responsibility to manage the EUR 10 billion fund to help companies affected by the economic crisis caused by the pandemic.
The airline was severely affected by the drop in demand and this bailout will help it to keep its operations.
SEPI granted EUR 75 millions more than what Air Europa requested in September, but the bailout is yet to be approved by the Council of the European Union, once the airline itself approves the conditions set by SEPI.
Air Europa already was granted with EUR 140 millions in May, backed by ICO (Official Credit Institute of Spain), accumulating more than EUR 600 millions in liquidity.
In addition, Air Europa parent holding Globalia received state aid to pay salaries of its 15.000 employees under the ERTE program, equivalent to EUR 38 million monthly. But Spanish media reports that even with that aid the company doesn’t have enough money to meet November and December payroll.
SEPI asked Air Europa to present a viability plan adapted to its new reality, arguing that the airline was “too optimistic” in relation to income projections considering Spain’s air transport slow recovery pace.
This aid package is not attached to the Spanish State entering in Air Europa board or capital because it is a hybrid instrument with preferential interest rates set by the European Commission. In fact, Brussels has already approved similar aid to airlines from other European Union countries and has set conditions as not to have to classify them as State aid.
