Aegean Airlines (A3, Athens Int'l) has confirmed that it “is in the final stage of discussions” with the Greek government over state aid for the privately-owned flag carrier.

Its announcement dated November 23 followed statements that the government’s chief spokesman, Stelios Petsas, gave to the media on the same day, revealing at a press conference that the airline and the Greek government had been discussing a capital injection of around EUR120 million euros (USD142.5 million).

“Aegean Airlines [...] is in the final stage of discussions with the Greek authorities over an agreement that would include company-specific state support. The agreement would have to be approved by the [...] European Commission, which has been already contacted to that end, a process which has been followed in recent months for other major airlines in the European Union,” the carrier said in its brief statement.

“Aegean will duly inform market participants in accordance with its disclosure and transparency obligations upon the completion of the process,” it concluded.

As the country’s biggest carrier, Petsas had explained at the news conference, Aegean Airlines’ survival is vital for Greece’s tourism-dependent economy.

Under the plan, he summarised, the government would receive warrants in exchange for providing funds. These warrants would ensure that “the state will get its money back when this coronavirus adventure is over” because the price of the shares will increase when a recovery in the travel sector comes.

The state would also reap the benefits of such a deal in the longer term, as air transport will provide “the wings that bring tourists to the country,” Petsas said, adding that the bailout “is already being evaluated to ensure formal approval by the European Commission.”

Aegean’s shareholders, meanwhile, would provide a further EUR60 million (USD71 million) under the agreement. According to MarketScreener data, the company’s main shareholders are the Estate of Theodore Eftichiou Vassilakis, the late entrepreneur who died in 2018, with 24.2%; Hertz International franchisee Autohellas with 11.7%; and the brothers Panagiotis Konstantinou Laskaridis and Athanasios Laskaridis with 8.56% each.

In late May, the flag carrier said it was in talks for EUR150 million (USD178 million) in loans from Greece’s four biggest banks - Alpha Bank, Eurobank, National Bank, and Piraeus Bank - under the auspices of the government’s Covid-19 Enterprise Guarantee Fund. A state guarantee for the five-year loans would be set at 80%, it said.

ch-aviation reached out to fellow Greek carriers Ellinair (EL, Thessaloniki) and SKY Express (Greece) (GQ, Heraklion) for comment. While SKY had not responded at the time of going to press, Ellinair’s chief executive Thanos Pascalis said: “Greek tourism and airlines have been hit hard. Aegean has secured EUR120 million in government support on top of a EUR150 million loan, which is all well and good according to what other governments have provided.”

He added: “The issue remains fair competition and a level playing field where open skies is applicable. We stress that government support has been very strong outside the EU as well. Billions have been poured into airlines, some justified, some not, but what about free and fair competition and smaller entities in general? They can’t be flying the flag on one side and ignoring the other side. So far, it’s he who has clout gets funded.”