Germany Planning $1.1 Billion Bailout of Embattled Airports
(Bloomberg) -- Germany is planning a 900 million-euro ($1.1 billion) bailout of the country’s airports, adding to a multibillion-euro outlay already aimed at helping the aviation sector survive the coronavirus.
The government will offer Berlin-Brandenburg, Cologne-Bonn and Munich a package of loans, grants and stake purchases worth more than 400 million euros, according to a transport ministry document seen by Bloomberg News, which didn’t specify the breakdown. A further 12 airports, including Deutsche Lufthansa AG’s Frankfurt hub, will get 200 million euros, provided the sum is matched by regional finance ministries.
DFS Deutsche Flugsicherung GmbH, the air-traffic control authority, would receive a 300 million euro capital injection in exchange for a stake. The packages must be agreed with local governments and other airport owners, although is unlikely to be rejected.
The bailouts would add to a lengthening German taxpayer bill to help the aviation sector, which is struggling to cope with the collapse in demand since the start of the pandemic. The federal government last year became Lufthansa’s largest shareholder as part of a 9 billion-euro rescue, and has provided funding for airline Condor and grounded pilots, cabin crew and other staff.
The country’s hubs are set to lose a combined 3 billion euros ($3.6 billion) across 2020 and 2021, according to the ADV airport association, whose head Ralph Beisel says terminals are “on the verge of collapse.”
Airports in Germany are typically owned by local or regional governments, with private investors such as AviAlliance GmbH also holding shares in some cases.
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