Spain's government said it had approved a EUR200 million euro (USD214 million) loan to Volotea (V7, Barcelona El Prat) as part of a series of bailouts to "strategic companies" to assist their recovery from the pandemic.
The aid will be channelled entirely through a participatory loan. As part of the deal, the shareholders of the privately-owned low-cost carrier must add a further EUR10 million (USD10.7 million) in cash to help steady the airline.
Volotea originally lodged its request for state funding in early December 2021, asking for up to EUR185 million (USD198 million). It said at the time that this could be a participatory loan provided via multiple lenders and stressed that "it does not plan to exhaust" the sum.
The bailout will arrive via Spain's sovereign wealth fund (Sociedad Estatal de Participaciones Industriales - SEPI), which said in a statement on June 7 that the "new temporary public support operation" was approved "after an exhaustive and rigorous process of analysis of the economic and legal situation" of Volotea.
On learning that the loan had been approved, Carlos Muñoz, founder and chief executive of Volotea, assured: "This participatory loan and the additional contribution from our shareholders will allow the company to grow solidly in the long term."
The Spanish government justified the aid by pointing out that the airline "focuses its route strategy on direct flights between medium-sized and small European cities that for the most part did not have another direct connection alternative before its entry to the market" and that Volotea also "develops connectivity between the islands and the continent."
In addition, it underlined that the carrier "has another line of business through its subsidiary Volotea Flight Academy, complementary to the main one, which focuses on providing training and instruction services in aeronautics" and that "the company plays a relevant role as an economic engine, generating value addition and employment throughout Spain."
With the new loan, SEPI has now approved Covid-era aid worth EUR2.503 billion (USD2.68 billion), 47% of the total amount that has been requested. Confirmation of the aid to Volotea came two weeks after a similar measure was provided to assist Air Nostrum (YW, Valencia Manises), to which the fund gave EUR111 million (USD119 million). Other recipients in the aviation sector have included Air Europa, Plus Ultra Líneas Aéreas, Wamos Air, and Iberojet (Spain) (integrated with tour operator Ávoris), while AlbaStar, which applied in October 2021, is still waiting.
