Gov’t tailwind of €115 million

Gov’t tailwind of €115 million

The government on Thursday announced the allocation of 115 million euros to support the local airline industry, which Greek flag carrier Aegean Airlines considered positive but “too little in comparison with other European Union states.” Instead the listed carrier is eyeing a €150 million state loan through the extraordinary credit mechanism for companies.

The ministries of Finance, Labor and Infrastructure announced a set of measures for the air transport sector, concerning 306 companies and 11,000 workers. It mainly concerns regulations for employees, such as the extension until July of the temporary suspension of labor contracts that comes with monthly compensation of €534.

The measures also include the labor project Syn-Ergasia, which will subsidize the social security contributions of employers and employees for the period from June 15 to December 31 – an intervention of €50 million. Aegean commented yesterday that the project covers 60% of their revenue losses in case of reduced employment until the end of the year. “The measures must continue and evolve,” the carrier argued, “it is necessary that they be extended up to the start of the 2021 tourism season.”

The government package further contains the application of the income taxation system for seamen, airline pilots, cabin crews and technicians, amounting to a flat rate of 15%, instead of the conventional income tax for individuals. That should lead to a €7.7 million reduction in annual salary costs for the sector’s companies.

Scheduled flights for subsidized routes (operating a public service) will also receive an additional subsidy of €20 per seat (plus value-added tax) for the months of April and May, benefiting airlines by another €6 million. The sector will further benefit from the reduction of VAT on all forms of transport from 24% to 13% for the June-October period, costing the state €30 million.

Aegean stated it “will fight mainly with its own strength, its own reserves.” It will submit loan requests to the four systemic banks for total state-guaranteed credit of €150 million.

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