Brus­sels ap­proves Ger­man res­cue aid to Air Berlin

The Malta Business Weekly - - FRONT PAGE -

The EU Com­mis­sion en­dorsed Mon­day un­der state aid rules Ger­many’s plans to grant Air Berlin a tem­po­rary €150m bridg­ing loan to al­low for the or­derly wind-down of the in­sol­vent air­line.

Ger­many no­ti­fied the Com­mis­sion on 15 August of its in­ten­tion to grant a bridg­ing loan to Air Berlin. This fol­lowed Eti­had, Air Berlin’s main share­holder, with­draw­ing its fi­nan­cial back­ing for the loss-mak­ing com­pany. The Ger­man pub­lic credit in­sti­tu­tion KfW will pro­vide a credit fa­cil­ity of up to €150 mil­lion to Air Berlin over the next months.

The pur­pose of the loan is to al­low Air Berlin to con­tinue op­er­a­tions in the com­ing months, with the aim of main­tain­ing its ser­vices while it con­cludes on­go­ing ne­go­ti­a­tions to sell its as­sets. At the end of the process, Air Berlin is ex­pected to cease op­er­at­ing and exit the mar­ket.

Res­cue and restruc­tur­ing aid are among the most dis­tortive types of state aid and can only be granted to com­pa­nies once these have ex­hausted all other mar­ket options. The Com­mis­sion’s guide­lines on res­cue and restruc­tur­ing aid al­low Mem­ber States to sup­port com­pa­nies in dif­fi­cul­ties, pro­vided, in par­tic­u­lar, that the pub­lic sup­port mea­sures are lim­ited in time and scope and con­trib­ute to an ob­jec­tive of com­mon in­ter­est.

The Com­mis­sion says it has taken ac­count of the fact that:

the loan will be paid out in in­stal­ments un­der strin­gent con­di­tions. In par­tic­u­lar, Air Berlin has to demon­strate its liq­uid­ity needs on a weekly ba­sis and new in­stal­ments will only be paid when all ex­ist­ing liq­uid­ity has been used.

Ger­many com­mit­ted to en­sure that ei­ther the loan will be fully re­paid, or Ger­many will sub­mit a wind­ing down plan for Air Berlin.

The Com­mis­sion found that the mea­sure will help to pro­tect the in­ter­ests of air pas­sen­gers and to main­tain air pas­sen­ger ser­vices. At the same time, the strict con­di­tions at­tached to the loan, its short du­ra­tion and the fact that Air Berlin is ex­pected to cease op­er­a­tions at the end of the process, will re­duce to a min­i­mum the dis­tor­tion of com­pe­ti­tion po­ten­tially trig­gered by the state sup­port. The Com­mis­sion there­fore con­cluded that the mea­sure is com­pat­i­ble with EU state aid rules.

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