MIAMI – Air Europa (UX) will be the recipient of a €475m (US$557m) bailout package after approval from the Spanish government earlier this week. This comes after the airline had requested €400m from the government in early September.

The aid package was granted through Sociedad Española de Participaciones Industriales, or SEPI–the government authority responsible for distributing funds to companies affected financially by the COVID-19 pandemic.

This is the second cash injection received by Spain’s third-largest carrier in 2020, after a EUR140mil injection in May.

It has been reported that the parent company of UX, Globalia, were also the recipients of over EUR70mil in government aid to cover salaries of 15,000 employees.

Air Europa Boeing 737-800 wearing the special ‘Argentina’ logo. PHOTO: Anna Zvereva/Wikimedia

Details of the Package

The €475m aid package will be split up into two parts–a €240m equity-backed loan and a regular €235m loan, according to spokeswoman Maria Jesus Montero. The Skyteam alliance member will have a maximum of six years to repay the loans.

In exchange for the assistance, the Spanish government will be seeking a say in the potential buyout from British conglomerate International Airlines Group (IAG). The groups subsidiaries include British Airways (BA) and Aer Lingus (EI), among others.

Although talks have stalled in recent months, IAG has continued to express interest in finalizing a deal for UX. A source at Reuters claims the British group was still interested as recently as last week.

Air Europa Boeing 787-8 Dreamliner. PHOTO: John Leivaditis/Airways

The Second Wave

Just a few months prior, experts shared a slight optimism for the state of the European travel industry heading into the holiday season. As COVID-19 case counts begin the rise again, the once-shared optimism is slowly dissipating. Germany and France are among the many European countries headed into the second wave of lockdowns and tough travel restrictions.

Air Europa, which operates a fleet of 45 aircraft, will continue to look at options to secure the short and long-term futures of the airline.

Featured Image: Air Europa “JJ Hidalgo” Boeing 787-9 Dreamliner. PHOTO: Anna Zvereva/Wikimedia