Which European Airlines Have Received Coronavirus Aid Packages?

Coronavirus has put many airlines around the world in financial distress. Europe, out of all the continents, has seen the most widespread effects of coronavirus. Since early March, the European airline industry has been on a backfoot. Flights out of major country markets like the UK, France, Germany, and Spain were at a time not even a small fraction of their past levels. Around early-April 2020, total traffic in Europe was down by 89% as compared to the same time last year.

The situation worldwide was pretty similar. Airlines were struggling to make money and looking for financial support. The passenger demand was bleak, and flying empty planes was hurting the airline’s cash reserves. Moreover, Europe is a very tourist-dependent continent. Cross-border tourism and international passengers contribute a significant chunk of passenger demand for airlines. The continued presence of coronavirus in the region and the absence of any vaccine has placed the airline industry into an unprecedented situation.

The wide-body fleet of Lufthansa awaits its next flight. Photo: Getty Images

Financial troubles

If not all, most European airlines are currently in a state of collapse. Some airlines are looking towards nationalization or privatization as a possible solution. Many have asked the government for aid packages or loans. Over the period of the last few months, many airlines have resorted to drastic cost-cutting measures. However, as the pandemic keeps the passengers at bay, airlines don’t have sufficient funds to stay alive.

Airlines in Europe have received more than EUR 25 billion (US$ 28.27 billion) in direct liquidity support since March 2020. Out of this, EUR 19 billion (US$ 21.47 billion) is targeted measures directly approved by the European Commission. National carriers have been able to obtain funding more quickly, as their survival is imperative to the national economy. Many of the low-cost airlines have, unfortunately, still not achieved any kind of support.

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Furthermore, financial aid mostly comes in the form of loans and loan guarantees and does not help to reduce debt. In the long term, financial assistance might do more harm than help. In the current predicted scenario, the airline market size will be smaller for the next few years. In a competitive environment, airlines might have to struggle while keeping in mind financial commitments. All in all, there is no clear sign as to which airline would be able to sustain in the long term.

Madrid-Barajas airport. Spain is one of the worst-hit countries. Photo: Getty Images

Possible way-out

Almost every flag carrier in major airline markets of Europe has received some kind of aid from their respective governments. France approved a grant for Air France in late-April, and the Dutch government aims to help KLM. Lufthansa Group has achieved the largest funding out of all. Italy plans to renationalize Alitalia while Norway has proposed an offer to help Norwegian.


On the 25th of June, Lufthansa was approved a EUR 6 billion (US$ 6.8 billion) from Germany’s economic stabilization fund for recapitalization. It received a further EUR 3 billion (US$ 3.4 billion) as part of the state guarantee. According to the offer, Lufthansa will have to transfer up to 24 take-off and landing rights to a competitor at each of its bases in Munich and Frankfurt. Earlier, there were talks to renationalize Lufthansa. Nothing substantial has been initiated in that aspect.

Lufthansa, Ryanair, Irresponsible Low Fares
Lufthansa has obtained the biggest aid package out of all. Photo: Getty Images

Austrian Airlines

The Austrian member of the Lufthansa group has been provided with EUR 150 million (US$ 169 million) equity injection by the parent company, Lufthansa. A further EUR 300 million (US$ 339 million) loan has been offered by the state ( of which 90% is guaranteed).

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TAP Portugal

The European Commission has approved, under EU State aid rules, Portugal’s plans to grant a EUR 1.2 billion (US$ 1.35 billion) rescue loan in favor of TAP Portugal. The rescue aid will be issued for a maximum of six months to give the company the time to work through an emergency. Portugues authorities have committed that TAP will reimburse the loan or submit a restructuring plan.


EU State has on the 10th of June, approved a EUR 286 (US$ 323 million) contribution to recapitalize Finnair. Around the 18th of May, Finnair had already achieved its first funding in state guarantee of up to EUR 600 million (US$ 678 million) as loans.

Air France – KLM

The French government had in early-June announced a EUR 15 billion ($17 bn) support package for the French aeronautical industry. The recovery plan includes a €7 billion loan package already granted to Air France-KLM.  The remaining amount will be provided to other smaller-companies and major OEM’s like Airbus.

Moreover, two months after this decision, the Netherlands came to the rescue of Air France – KLM with EUR 3.4 billion in state aid. Both the countries, France and the Netherlands, hold 14% stakes in the airline group.

Air France-KLM
Air France-KLM has received fundings from France and Netherlands. Photo: KLM


Scandinavian Airlines, the flag carrier of Denmark, Norway, and Sweden, was given a state guarantee on a revolving credit facility of up to EUR 137 million. The governments of Sweden and Denmark have both contributed to this funding.

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Sweden has further allotted EUR 455 million in state-backed loans schemes for airlines with a Swedish commercial aviation license.

British carriers

British Airways and Ryanair have both taken advantage of the COVID Corporate Financing Facility set up by the Bank of England. British Airways received GBP 300 million ( $ 374 million) while Ryanair received GBP 600 million ($ 749 million). EasyJet has similarly accessed GBP 600 million from the same source.

British Airways has considerably cut its workforce. Photo: BA

Spanish airlines

Spanish state-owned Instituto de Credito Oficial has granted Iberia a total sum of EUR 750 million. The Spanish low-cost airline, Vueling, has attained EUR 260 million from the same source.

Road to recovery

The passenger demand recovery will be gradual and take several years. European air traffic is expected to be 60% lower than 2019 levels in 2020, and 20% and 10% lower, respectively, in 2021 and 2022. Moreover, airlines will, in general, have a smaller fleet size and network. The competitive nature would still exist and might force airlines into serious financial implications. In the next few months, possibly even years, we might continue to see aid packages, especially for the airline industry.

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