EC okays €138mn in French state aid for Air Austral

The EC)has authorised French state aid of E136.8m to Air Austral, of which E119.3m is earmarked for restructuring the airline and E17.5m in compensation for damages suffered during the Covid-19 pandemic. In a January 5 statement, the EC also announced it had approved the restructuring plan, which runs from January 2022 to March 2025. Air Austral will contribute towards its funding through its own or private sources of funds. The new aid followed a loan of E20m from the French state to Air Austral on January 18, 2022. Measures aimed at limiting distortions in competition will remain in place during the above-mentioned restructuring period. These include limitations on the number of seats and routes operated by Air Austral and a ban on acquiring stakes in other undertakings and business agreements with other airlines. Brussels believes the restructuring plan will ensure the airline's long-term viability and prevent it from being wound up, which it said would harm Réunion as an outermost and assisted department of France. It reiterated that Air Austral ensured territorial continuity between Réunion and neighbouring Indian Ocean islands (Mayotte in particular) and mainland France.<br/>