Spain approves €475m loan package for Air Europa

Spain’s government announced on Tuesday evening that it had agreed on a 475-million-euro aid package for the struggling airline Air Europa, dpa reported. Some €240m would be made available as a participating loan and the rest as a regular loan with a six-year term, finance minister Maria Jesus Montero said.

It marks the first time a fund set up for strategic companies hit hard by the coronavirus pandemic has been used, the minister noted.

Prior to the pandemic the airline flew to 69 destinations in Europe, North and Latin America and Africa. At the end of 2018, the airline had a fleet of 66 aircraft and carried around 11.8m passengers.

However, the EU in Brussels still has to approve the loan, the La Vanguardia newspaper reported. During the first wave of the pandemic, Air Europa already received €140m from the state.

Montero said that the government would also now have a say on the sale of the company or potential alliances made. This could have an impact on Spanish airline Iberia's agreement made last year to take over Air Europa for €1bn. However, British Airways' parent company International Airlines Group (IAG), to which Iberia belongs, is demanding a substantial price reduction from Air Europa's owner, the holding company Globalia, due to the slump in air traffic caused by the coronavirus pandemic, according to media reports.

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