Germany agrees to give COVID-hit airports financial aid

BERLIN (Reuters) – Germany agreed on Friday to offer more aid to its airports to try to save jobs and preserve infrastructure as the COVID-19 pandemic continues to wreak havoc on the aviation industry.

Berlin will discuss with the states financial options for airports over the next two weeks, according to a joint statement from the government and representatives of the aviation industry seen by Reuters ahead of an aviation summit in Berlin.

“Additional joint efforts by the federal and state governments are required to secure the economic basis of the airports in the medium term,” the document said.

Plummeting passenger numbers mean 25-30% of the roughly 180,000 jobs at Germany’s airports are at risk, Transport Minister Andreas Scheuer earlier told Deutschlandfunk radio.

Berlin’s long-overdue new airport opened last Saturday just as the aviation industry struggles with collapsing demand. It is not expected to make enough revenue to pay back its debts.

The German industry has demanded compensation of up to 1 billion euros ($1.2 billion) to help cover the costs of keeping airports open even when there is barely any traffic due to lockdowns. There was no mention of this sum in the document.

The government is examining possibilities to bridge or cover the loss of revenue at state air traffic control association DFS to prevent a sharp increase in fees for airlines, the document said.

It also wants to expand long-haul routes, which are profitable for airlines but have been largely suspended, by exempting passengers on selected flight corridors from COVID-19 entry restrictions. To do this, it plans to establish pre-defined testing and quarantine regimes with health authorities.

The transport ministry also wants to prevent ‘dumping prices’ for airline tickets in the future, so that they can’t cost less than taxes and fees.

Support for Europe’s aviation sector has varied among states, with Germany and France the biggest contributors via bailouts for Lufthansa LHAG.DE and Air France-KLM AIRF.PA, according to a study in the Journal of Air Transport Management.

Britain has so far resisted demands for specific financial support to the industry, although UK airports and airlines such as IAG’s ICAG.L British Airways have benefited from government wage subsidies, emergency loans and financing facilities available across the economy.