[Coronavirus] State aid for (European) airlines ?

[lumumba]

The problem with SN is that they chose growth over profitability...

No? They didn't choose for growth instead of profitability. At the contrary: they had hoped that profit would follow their growth.

...which was mentioned here quite a few times.

Indeed. You mentionned it and you repeated it. Because you misquoted Christina Foerster.

I'm totally agree with you Passenger.

[Poiu]

in the meantime people and businesses should prepare for immediately after Covid-19, with Belgium and with Brussels Airlines.

You seem to think that Covid 19 will disappear overnight and that it will be business as usual the next morning, I think it won’t.
In Belgium alone, one million people are unemployed because of this, 25% of the companies are on the brink of bankruptcy, it won’t be business as usual immediately after!
All the billions used to keep unviable businesses alive will put even more pressure on the recovery as it will sustain overcapacity.
When we come out of this we will be facing a recession, the State, individuals and the companies will all be in survival mode for a considerable amount of time.
Dumping taxpayers money in bottomless pits will only delay the recovery of viable companies.

[Conti764]

in the meantime people and businesses should prepare for immediately after Covid-19, with Belgium and with Brussels Airlines.

You seem to think that Covid 19 will disappear overnight and that it will be business as usual the next morning, I think it won’t.
In Belgium alone, one million people are unemployed because of this, 25% of the companies are on the brink of bankruptcy, it won’t be business as usual immediately after!
All the billions used to keep unviable businesses alive will put even more pressure on the recovery as it will sustain overcapacity.
When we come out of this we will be facing a recession, the State, individuals and the companies will all be in survival mode for a considerable amount of time.
Dumping taxpayers money in bottomless pits will only delay the recovery of viable companies.

I never said it will be business as usual overnight when Covid-19 is 'done', I am convinced that it actually will take up to more then a year to fully end Covid-19, albeit with less severe measures than today.

I was merely pointing out that it's a bit premature to already draw up plans for when Belgium would split due to this crisis.

I know you prefer to no longer support SN, as you already stated. So what do you propose? No major airline in Belgium anymore?

The government will be unable to keep every company afloat so indeed should focus on companies that are either viable or of strategic importance. SN is certainly one of those since it remains one of the biggest employers of the country and of the upmost importance for BRU, Belgiums second biggest economic pool.

[sn26567]

Some political posts and the reactions thereto have been removed.

Let's remain on topic, please.

[jerry]

Finnair to receive 600M loan from government. https://simpleflying.com/finnair-600m-loan/

maybe it would be good to keep track of all these amounts / airline / state?

[Homo Aeroportus]

in the meantime people and businesses should prepare for immediately after Covid-19, with Belgium and with Brussels Airlines.

You seem to think that Covid 19 will disappear overnight and that it will be business as usual the next morning, I think it won’t.
...

I agree with you.

First it will not be a matter of pushing the Start button and resume all operations at once.
Then we may also see lingering reluctance for mass travel to exotic destinations due to fear of possible remnant pockets of virus here and there but also fear of being stranded abroad.

True, the air transportation industry has been able to surf the waves of crises in the past as the graph below shows.
But none were of the type and depth as the current one.

Abstract of the Airbus 2019 Global Market Forecast published six months ago.


Besides most probably leading to a change of players (who will be the survivors when the dust settles?), it may also turn into a game changer.
Combination of several factors such as :
* Stop have everything produced in China (or India, Vietnam, ...) and return to a more local sourcing,
* Greta's finger pointed towards a 29.99 air fare for a week-end at 1000km from home,
* Getting used, after months of the current situation, to thinking and acting local in your daily life and discovering that there is a bakery proposing a real tasty bread and that I can reach by foot instead of driving to the supermarket and endure this crowd, ...

Could this lead to a societal change ?
In this case it may impact severely and durably the air transport industry due to changes in our habits, whether for business or leisure travel.

Worth staying around to see the end/beginning of it.

In the meantime, stay safe :

H.A.

[Passenger]

Not that long ago, the European Commission has published guidelines for state aid. For me, the two most important conditions are:
1. the beneficiar must be able to refund the state aid within six months;
2. the aid may not falsify competition between airlines, airports and/or third parties.

That in mind, new Belgian state aid to aviation is already very limited, unless the European Commission softens its conditions (which they won’t do – cfr their recent harse statement on 261/2004).

Edited by moderator. Please abstain from political comments.

[lumumba]

Not that long ago, the European Commission has published guidelines for state aid. For me, the two most important conditions are:
1. the beneficiar must be able to refund the state aid within six months;
2. the aid may not falsify competition between airlines, airports and/or third parties.

That in mind, new Belgian state aid to aviation is already very limited, unless the European Commission softens its conditions (which they won’t do – cfr their recent harse statement on 261/2004).

I don't think so everything will go smoothly because the guidelines of the EU will despair and for a while,look to what Trump is doing it will be the same here and everybody will be in good will to restart the economy.
Brussels Airlines is already in discussions with the government and everybody is agree that we have to keep this strategic industry.
Alitalia is nationalised maybe other airlines will follow but the austerity guidelines are gone for a while now.

[Inquirer]

Indeed, let's keep the head cool.

The Belgian government and the national bank have just concluded an agreement with our private banks to provide businesses in Belgium with additional liquidity to bridge the current crisis.
The risks are to be shared between private banks and our government for this operation; that way private funds are used initally and government money is only employed as a security to this, thus limiting the risk for public finances AND maximizing the impact of the unlimited government backing.
No idea if this mechanism is also going to be used to protect our aviation sector, but it's a good call IMHO, because it's clear we will need to help a lot of companies (not just in aviation) get through this difficult times ahead and conserve a maximum of our economic network if we want to be able to resume without a competitive handicap versus the rest of Europe.
We'll really have to do it ourselves here in Belgium: nobody else is going to come and do it for us.
Glad that much seems to be understood.

Back to Belgian aviation:
If you genuinely think we now have the luxury in Belgium to let existing mass employers and strategic entities like the only network airline based in BRU falter, with the naive idea that some magical others will quickly fill their void from abroad, think again: reality is this is a global crisis, which means everybody will be very bussy getting back on their feet in their home markets first and let us here in Belgium wait with not much concrete at all for the forseeable future.
Definitely not the smartest idea, if we do not want to fall behind in the economic recovery phase, which is why basically no country is considering such a laisser-faire attitute.
I could point out that this economic Darwinism was in fact partially put in practice in 2001 after the demise of Sabena, when the Belgian government didn't intervene directly and only helped set up a much smaller entity to partially fill the void left behind: it took more a full decade to get BRU back to the same levels as in 2000 with a considerable GDP hit on top during that decade, ironically thanks to the growth of that small entity set up by them... without it, BRU would likely not have recovered fully yet!
Just saying the theory from the early 2000 cleary didn't match reality.
What would make things go differently now, you think?

[Boavida]

Some political posts and the reactions thereto have been removed.

Let's remain on topic, please.

Unbelievable. I regret this constant removal of comments because they are 'political'.

The question whether the government will help airlines is political! We are in the middle of the biggest crisis since WWII in combination with a huge political crisis in Belgium (that will affect aviation!) and we can't talk about politics?

Is everybody ok with this kind of censorship on this forum?

[Boavida]

You can call it bullshit, but it is a possibility. I know it's an inconvenient truth for some, but sticking our head in the sand and ignoring it isn't going to help as it could have a great impact on aviation.

[Passenger]

Stade aid has nothing to do with separatism or the creation of a new government in Belgium.

Who will decide which airline gets what money? The Board of the Brussels Museum of Science? No: politicians will decide. The government. The new government that is in power since last Monday. A goverment that needs the support from politicians who demand an aviation tax and a night curfew for Brussels Airport.

My bet: the new Belgian government will decide that airports are vital, but that airlines are not vital.

[Conti764]

Stade aid has nothing to do with separatism or the creation of a new government in Belgium.

Who will decide which airline gets what money? The Board of the Brussels Museum of Science? No: politicians will decide. The government. The new government that is in power since last Monday. A goverment that needs the support from politicians who demand an aviation tax and a night curfew for Brussels Airport.

Who decides, who the government is and bla-bla-bla is not to be discussed here.
Point.

It is, however, relevant when the main backing of the minority government is made up of parties who are at the very least not aviationfriendly and who consider BRU as a burden.

[Conti764]

Stade aid has nothing to do with separatism or the creation of a new government in Belgium.

Who will decide which airline gets what money? The Board of the Brussels Museum of Science? No: politicians will decide. The government. The new government that is in power since last Monday. A goverment that needs the support from politicians who demand an aviation tax and a night curfew for Brussels Airport.

My bet: the new Belgian government will decide that airports are vital, but that airlines are not vital.

Which will lead to a underhanded cut of BRU activity. Belgian politics are extremely cynical...

[sn26567]

Who will decide which airline gets what money? The Board of the Brussels Museum of Science? No: politicians will decide. The government. The new government that is in power since last Monday. A goverment that needs the support from politicians who demand an aviation tax and a night curfew for Brussels Airport.

Who decides, who the government is and bla-bla-bla is not to be discussed here.
Point.

It is, however, relevant when the main backing of the minority government is made up of parties who are at the very least not aviation friendly and who consider BRU as a burden.

Nothing has happened yet. It would be wise to wait for the publication of any plan before drawing conclusions.

[lumumba]

Who decides, who the government is and bla-bla-bla is not to be discussed here.
Point.

It is, however, relevant when the main backing of the minority government is made up of parties who are at the very least not aviation friendly and who consider BRU as a burden.

Nothing has happened yet. It would be wise to wait for the publication of any plan before drawing conclusions.

Exactly