State, Shareholders to Inject Capital into Greece’s Covid-hit AEGEAN Airlines

Photo source: @Aegean Airlines

The Greek government and shareholders in national carrier AEGEAN are awaiting European Commission approval to inject a total of 180 million euros to safeguard the airline which has been hit hard by the coronavirus (Covid-19) pandemic.

Contributing annually more than 400 million euros to the Greek economy, AEGEAN is in for an immediate cash injection of 120 million euros from the state and at least 60 million euros from its stakeholders as part of a support package presented by EU states for their national airlines.

The expected 120-million-euro cash boost is significantly below the 32-billion-euro package slated for EU airlines support. 

It should be noted that shareholders’ participation through a share capital increase is a condition for state aid to cover pandemic-created losses.

Since the global outbreak of Covid-19 in March, the number of arrivals in Greece nosedived by 95 percent, creating massive losses for the Greek carrier. Indicatively, in the first nine months of 2020, AEGEAN’s cash burnout amounted to 160 million euros, 65 million euros of which were recorded in Q2. 

In the first half of 2020, AEGEAN handled 1.22 million domestic passengers, down by 55.7 percent compared to the same period in 2019.

In May, the Greek government said it would inject 115 million euros into the country’s air transport sector to help it recover losses incurred by the coronavirus health crisis.

Meanwhile, last week the European Commission proposed the extension into 2021 of measures adopted to ease the financial pressure on aviation operators and ground handlers in the EU.

Greek Government Spokesman Stelios Petsas. Photo source: media.gov.gr

“The Greek state will not only invest money, but will also receive money,” said Government Spokesperson Stelios Petsas, adding that air transport is a “strategic sector for the operation of the economy” and the means of bringing tourists to Greece.

“For every euro contributed by the Greek state, 50 cents will be offered by private shareholders. So we have a partnership to strengthen the company’s capital base,” he said.