COMMISSION DECISION
of 28 August 2009
on State aid C 6/09 (ex N 663/08) — Austria Austrian Airlines — Restructuring Plan
(notified under document C(2009) 6686)
(Only the German text is authentic)
(Text with EEA relevance)
(2010/137/EC)
1.
PROCEEDINGS
2.
DESCRIPTION OF THE FACTS
2.1.
Background to the investigation
2.2.
Measures under investigation
2.2.1.
The market price of ÖIAG’s shareholding in Austrian Airlines
2.2.2.
ÖIAG acted as a market economy investor, as any other scenario would have resulted in higher costs
2.2.3.
The restructuring plan submitted for Austrian Airlines
3.
COMMENTS FROM AUSTRIA
3.1.
Conditions imposed on the privatisation
3.1.1.
Preservation of as many jobs as possible
3.1.2.
Keeping the headquarters in Austria
3.1.3.
Ensuring an Austrian core shareholder structure of 25 % plus one share
3.1.4.
Creating a committee to protect Austria’s interests
3.2.
The purchase price corresponds to the market price
3.3.
ÖIAG acted as market economy investor
3.3.1.
Costs relating to the insolvency of Austrian Airlines
Parent company |
Subsidiary |
Date |
Rating downgrade (Standard & Poor’s) |
|
Parent company |
Subsidiary |
|||
Postbank |
BHW Bausparkasse |
22 June 2007 |
from A to A– |
from A– to BBB+ |
Post |
Postbank |
22 June 2007 |
from A to A– |
from A to A– |
UniCredit |
Bank Austria |
18 March 2009 |
from A+ to A |
from A+ to A |
UniCredit |
Hypovereinsbank |
18 March 2009 |
from A+ to A |
from A+ to A |
(in EUR million) |
|||
Employee-related liabilities in the event of insolvency of the Austrian Airlines Group |
Austrian Airlines AG |
Tyrolean |
Austrian Airlines Group |
Severance payments in accordance with legal obligations and collective bargaining agreements |
[…] |
[…] |
[…] |
Pensions |
[…] |
[…] |
[…] |
Accrual of annual leave |
[…] |
[…] |
[…] |
Other employee-related costs |
[…] |
[…] |
[…] |
Social plan |
[…] |
[…] |
[…] |
Pension claims |
[…] |
[…] |
[…] |
Total employee-related liabilities |
[…] |
[…] |
[…] |
Payments by the Austrian Insolvency Remuneration Fund |
[…] |
[…] |
[…] |
Total liabilities to be assumed by ÖIAG |
[…] |
[…] |
[…] |
3.3.2.
Costs of an orderly winding-up of Austrian Airlines
3.3.3.
Cost to be borne by ÖIAG for restructuring on a stand-alone basis
3.3.4.
Conclusion
3.4.
The restructuring plan for Austrian Airlines
3.4.1.
Austrian Airlines is a company in difficulty
3.4.2.
Cost savings and synergies resulting from the restructuring plan
3.4.3.
The aid amount is reasonable
3.4.4.
Compensatory measures
3.4.5.
Own contribution
Measure |
Restructuring costs (EUR million) |
Own contribution (EUR million) |
Contribution of the Republic of Austria |
||
|
[…] |
[…] |
[…] |
||
|
[…] |
[…] |
[…] |
||
|
[…] |
[…] |
[…] |
||
|
[…] |
[…] |
[…] |
||
|
[…] |
[…] |
[…] |
||
Total amount |
[…] |
[…] (Level of own contribution: 55,5 %) |
[…] |
4.
COMMENTS FROM THIRD PARTIES
4.1.
Austrian Airlines
Company |
Year |
Employees |
Compensated social cost |
|
Eurostar Automobilwerk GmbH und Co. KG |
from 1995 |
150 |
Social plan |
[…] |
Semperit Reifen GmbH |
1997-2002 |
1 000 |
Employment foundation and social plan |
[…] |
Philips, closure of the factory in Lebring |
1999-2000 |
200-300 |
Social plan |
[…] |
Elektra Bregenz |
2003 |
234 |
Severance payments and social plan |
[…] |
Legrand Austria |
2003-04 |
150 |
Social plan |
[…] |
Verbund, closure of the Voitsberg IV power station |
2004 |
220 |
Employment foundation and additional severance payments |
[…] |
Phelps Dodge Magnet Wire Austria |
2004-05 |
55 |
Social plan |
[…] |
Austria Tabak |
2005 |
220 |
Severance payments and employment foundation |
[…] |
Austria Tabak |
2009 |
269 |
Severance payments and employment foundation |
[…] |
Thonet-Vienna, closure of the factory in Friedberg |
2006 |
25 |
Additional severance payments |
[…] |
AT & S |
2007 |
35 |
Social plan |
[…] |
(in EUR million) |
||
|
Social cost |
|
|
Minimum amount |
Maximum amount |
Severance payments |
[…] |
[…] |
Accrual of annual leave |
[…] |
[…] |
Pension scheme |
[…] |
[…] |
Social plan |
[…] |
[…] |
Total |
[…] |
[…] |
(in EUR million) |
||
|
Costs |
|
|
Lower value |
Upper value |
Sale of aircraft |
[…] |
[…] |
Repayment of aircraft financing |
[…] |
[…] |
Social costs |
[…] |
[…] |
Termination of long-term contracts |
[…] |
[…] |
Remaining costs and proceeds (netted) |
[…] |
[…] |
Total cost |
[…] |
[…] |
4.2.
Lufthansa
4.3.
Ryanair
4.4.
Air France/KLM
4.5.
NIKI
4.6.
Air Berlin
4.7.
Robin Hood Aviation
4.8.
WKO — Die Luftfahrt
4.9.
Wien — konkret
4.10.
Observations received from private individuals
5.
COMMENTS FROM AUSTRIA ON THIRD-PARTY COMMENTS
5.1.
The appropriateness of the process
5.2.
Negative Purchase Price
5.3.
Negative Market Value
5.4.
Alternative scenarios
5.5.
The restructuring plan
5.6.
Replies to other matters raised in the third-party observations
6.
PRESENCE OF AID
6.1.
Legal basis for appraisal of aid
6.1.1.
Evaluation of the sales price of Austrian Airlines
(in EUR million) |
|||||||
|
Phase I |
Phase II |
Phase III |
||||
|
Dec 2008 Ist |
2009 Budget |
2010 Budget |
2011 Budget |
2012 Budget |
2013-21 Budget(35) |
2022 onwards Terminal value |
Revenue |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
EBITDA |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
Depreciation |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
EBIT |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
Adjusted tax |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
Net Operating Profit Less Adjusted Tax |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
+ Depreciation |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
+/– Change in capital expenses |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
+/– Change in working capital |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
Free Cash Flow (FCF) |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
WACC |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…](34) |
NPV Phase I + II + III |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
Total NPV |
[…] |
|
|
|
|
|
|
NPV loss carried forward |
[…] |
|
|
|
|
|
|
Non-operating assets |
[…] |
|
|
|
|
|
|
Entity value |
[…] |
|
|
|
|
|
|
Net debt |
[…] |
|
|
|
|
|
|
Equity value |
[…] |
|
|
|
|
|
|
Source: Deloitte valuation report dated 19 March 2009 |
(in EUR million) |
||
WACC |
Equity Value |
Difference in the equity value |
[…] % in Phase I and II and […] % in Phase III |
[…] |
[…] |
[…] % |
[…] |
[…] |
[…] % |
[…] |
[…] |
(in EUR million) |
|||||
|
Entity value (1) |
Net debt (2) |
Equity value (1) – (2) |
Difference in the equity value |
Difference in the equity value (%) |
‘Best-case’ (‘optimistic’) Scenario |
[…] |
[…] |
[…] |
[…] |
[…] |
Baseline scenario (Deloitte) |
[…] |
[…] |
[…] |
[…] |
[…] |
‘Worst-case’ scenario |
[…] |
[…] |
[…] |
[…] |
[…] |
Sensitivity […] |
Cumulative […] |
Cumulative adjusted consolidated […] |
Payout |
0,0 % |
[…] |
[…] |
[…] |
[…] % |
[…] |
[…] |
[…] |
[…] % |
[…] |
[…] |
[…] |
[…] % |
[…] |
[…] |
[…] |
(in EUR million) |
||||
Price paid by Lufthansa for ÖIAG’s shareholding |
Maximum price |
Minimum price |
||
|
[…] |
[…] |
||
|
[…] |
[…] |
||
|
[…] |
[…] |
||
Total amount (1) + (2) + (3) |
[…] |
[…] |
6.1.2.
Application of the ‘market economy investor’ test
6.1.3.
Conclusion
7.
COMPATIBILITY OF THE AID WITH THE COMMON MARKET
7.1.
Compatibility with the common market and possible infringement of internal market rules
7.1.1.
Identity and eligibility of the firm
7.1.2.
Restoration of long-term viability
(in EUR million) |
||||||
EBIT before exceptional items |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
|
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
7.1.3.
Level of own contribution
Measure |
Opinion of Austria |
Opinion of Lufthansa |
Assessment by the Commission |
ÖIAG’s contribution to reducing net liabilities |
EUR 500 million 0 % own contribution |
EUR 500 million 0 % own contribution |
EUR 500 million 0 % own contribution |
Reduction of borrowing ratio to the level of Lufthansa |
[…] |
[…] |
[…] |
Costs of the ‘Go4Profit’ programme |
[…] |
[…] |
[…] |
Additional restructuring measures under way since December 2008 |
[…] |
[…] |
[…] |
Cost of integration with a view to generating the necessary synergies |
[…] |
[…] |
[…] |
Consultancy/transaction costs |
[…] |
[…] |
[…] |
Higher refinancing costs due to financial crisis |
[…] |
[…] |
[…] |
NPV of cumulative operating losses |
[…] |
[…] |
[…] |
Total overall restructuring costs |
[…] |
[…] |
[…] |
Level of own contribution |
EUR […] (56 %) |
EUR […] (67 %) |
EUR […] (64 %) EUR […] (52 %) |
7.1.4.
Aid must be kept to the minimum
7.1.5.
Compensatory measures
7.1.6.
Additional conditions and commitments
7.1.7.
One time, last time
Article 1
Article 2
Article 3
Phase II |
2013 budget |
2014 budge |
2015 budget |
2016 budget |
2017 budget |
2018 budget |
2019 budget |
2020 budget |
2021 budget |
Total |
FCF |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
WACC |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
|
NPV |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |
[…] |