The European Commission has approved a €120m Greek grant to Aegean Airlines for damages suffered due to travel restrictions implemented in the EU to contain the spread of the coronavirus pandemic.
The measure, which was assessed by the Commission under Article 107(2) (b) of the Treaty on the Functioning of the European Union (TFEU), covers part of damage suffered during the period between March 23 to June 30.
The European Commission found that the Greek damage compensation measure is in line with EU State aid rules.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The aviation industry is one of the sectors that has been hit particularly hard by the coronavirus outbreak. This measure will enable Greece to compensate Aegean Airlines for the damage directly suffered due to the travel restrictions necessary to limit the spread of the coronavirus.
"We continue working with Member States to find workable solutions to support companies in these difficult times, in line with EU rules," she added.
The grant approved is conditioned upon the airline successfully effecting a private investor share capital increase of €60m.
Additionally, the Greek state shall receive free warrants (without consideration), with a strike price equal to the price that investors shall be offered new shares upon the capital increase.
Warrants will be exercisable any time during the period between 2 to 5 years after the disbursement of the support by the Greek state so as for the Greek State to benefit from any future upside in the share value of the Company.
"The state support was agreed after taking into consideration the grave consequences caused by the coronavirus to the airline sector as well as Aegean’s substantial contribution to Greece’s tourism, overall economy and direct public revenues," Aegean Airlines said in a press release.
Following the European Commission’s approval of the Greek state aid, all necessary procedures are expected to be completed within the first three to four months of 2021.
In 2019, Aegean Airlines transported about 15 million passengers. Before the coronavirus outbreak, Aegean operated flights from its main hub in Athens and from other Greek airports to 155 domestic and international destinations in 44 countries.
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