Airline deal

Cash help for Palma based airline. | Europa Press

03/11/2020 15:07

The Spanish government approved this morning a 475 million euro ($555.85 million) aid package for Palma-based Air Europa, making the airline the first major Spanish company to tap into funds established to help companies in strategic sectors weather the pandemic.

The package will comprise a 240 million euro equity-backed loan and a 235 million euro regular loan, government spokeswoman Maria Jesus Montero told a news conference.
Air Europa will have a maximum of six years to repay the loans, Montero told reporters after a weekly cabinet meeting.

"In the case of Air Europa, the impact of the pandemic ... is evident, due to the drastic reduction in air traffic caused by reduced mobility and fewer tourist arrivals," Montero said, adding that the number of flights operated by the airline plunged 95% in the second quarter.

Air Europa, whom sources said had asked for help to weather the pandemic, did not immediately respond to a request for comment.

British airways owner IAG, which agreed to buy Air Europa for 1 billion euros last November, said last week it was still interested in pursuing the deal.

International travel restrictions have brought the global transport sector to a grinding halt, pushing several airlines to rely on state aid.

Air France-KLM received 7 billion euros from the French government in April, while German flag carrier Lufthansa secured a 9 billion euro bailout in June.