May 15, 2020 / 1:00 PM / 18 days ago

Belgium tells Lufthansa state aid possible if conditions met

BRUSSELS (Reuters) - The Belgian government said on Friday it was committed to reaching a deal with Lufthansa (LHAG.DE) to save its Belgian subsidiary Brussels Airlines if the future of the national carrier was guaranteed.

FILE PHOTO: The logo of Brussels Airlines is seen at the entrance of the company headquarters, near the International airport of Zaventem, during the coronavirus disease (COVID-19) outbreak in Diegem, Belgium May 12, 2020. REUTERS/Yves Herman

Belgian prime minister Sophie Wilmes and key ministers said in a joint statement with Lufthansa that the government needed guarantees of a realistic and future-oriented business plan that saw the Belgian carrier as a profitable operation with favourable job prospects.

“Today’s meeting provided both parties with the opportunity to clarify their respective positions and to accelerate a convergence of these positions,” the statement said after Wilmes and her ministers met a Lufthansa team led by CEO Carsten Spohr.

Belgium is requesting that the number of forced layoffs at Brussels Airlines should be as limited as possible. The carrier announced on Tuesday plans to cut its fleet by 30% and its staff by a quarter to guarantee its survival during and after the pandemic..

At stake is also the future of the national airport, Brussels Airport, where Brussels Airlines represents 40% of air traffic.

Both Lufthansa and the Belgian government said they recognised the importance of the airport as an economic hub and the need for a growth plan focused on destinations in Africa and North America.

Airlines across Europe have been stranded since March due to the pandemic.

Brussels Airlines, which has 4,200 staff, said it needed to cut costs to a competitive level and was also asking for support from both Lufthansa and the Belgian government.

Friday’s statement said progress had been made despite “difficult” conversations in recent weeks and negotiations would continue in the coming days to agree on the form and conditions of a possible Belgian state investment.

“Both parties are firmly committed to reaching a fruitful agreement,” the joint statement said.

Reporting by Marine Strauss @StraussMarine; editing by Philip Blenkinsop and Louise Heavens

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