Austrian aid for Lufthansa's AUA to be linked to climate targets

VIENNA (Reuters) - State aid for Austrian Airlines, which the government in Vienna is currently negotiating with parent company Lufthansa LHAG.DE, should support climate policy targets, Austria's environment minister said on Thursday.

FILE PHOTO: Planes of Lufthansa's Austrian unit Austrian Airlines park at Vienna International Airport in Schwechat, Austria March 16, 2020. REUTERS/Lisi Niesner/File Photo

Lufthansa, which like many other international carriers was forced to ground nearly all its flights due to the coronavirus, is negotiating with Berlin about state aid for its German operations and with the Swiss, Belgian and Austrian governments on financial support for its divisions in those countries.

“If we are talking about several hundred million euros in taxpayers’ money, then it is clear, that (such aid) will be linked to conditions,” Leonore Gewessler told a news conference.

“When it is about an industry that particularly needs to contribute to climate protection, then it makes a lot of sense ... to use this situation to support this transformation,” the minister, a member of the Greens, said.

Conditions could include a significant reduction in short-haul flights, the use of eco-friendly jet fuel and adjustments to the flight tax, a ministry spokesman said.

Austria currently imposes a levy of 12 euros per passenger per flight.

Austria, which sold Austrian Airlines (AUA) to Germany’s flag carrier in 2009, is also insisting on job guarantees, Vienna remaining a transfer hub, and a say in strategic decisions in exchange for financial support, the spokesman said. It also expected to get money back.

Negotiations are ongoing, and no deadline has been set, said economics minister Margarete Schramboeck at the joint news conference with Gewessler. Asked whether the government considered taking part ownership of AUA, she said it was not the aim to take stakes in companies.

Schramboeck also did not comment on the amount of the potential aid, which according to media speculation could be 500-800 million euros, roughly three months’ revenue for AUA.

AUA has said the amount of state aid will determine how many of its 7,000 employees lose their jobs. Currently, all of them are on significantly reduced working hours.

AUA extended its halt on flight operations until May 17 on Thursday, while other Lufthansa divisions are mainly operating repatriation flights until then.

Ryanair RYA.I unit Lauda has said that it expects similar support for its Austrian staff under EU state aid rules.

Reporting by Kirsti Knolle; Editing by Michelle Martin and Giles Elgood