Greece will support Aegean Airlines with a capital injection of 120 million euros to help the iconic company come through the effects of the coronavirus pandemic, the Greek government announced on Monday.
The news drove the carrier’s shares 10% lower to 3.79 euros, later recovering to trade 8.7% lower.
Under the plan, the government would receive warrants in exchange for providing funds for the privately-owned Aegean Airlines, the government’s chief spokesman, Stelios Petsas, said during a press conference.
Aegean shareholders would also provide an additional 60 million euros.
In the longer term, the state would get its money back as air transport provided “the wings that bring tourists to the country,” Petsas said.
“With the warrants the state will get, when recovery comes, the price of the shares will increase, meaning the state will get money back when this coronavirus adventure is over.”
Petsas added the plan was being developed in a way to secure approval from European authorities that assess whether state aid is fair.
“The state support plan of the airline sets as an integral part, the capital increase of Aegean with the participation of its shareholders,” Petsas said.
“It is noted that the decision of the government is compatible with the European framework of state aid to companies and sectors affected by the pandemic, such as the aviation sector.”
The 120 million euros worth of financial support from the Greek government is still a much lower amount than the assistance, worth more than 32 billion euros, which other European aviation companies have received or are about to receive.