The management of charter airline Air Belgium, facing significant financial difficulties, has agreed to sell 49% of shares in the company to an undisclosed Chinese investor, L’Écho reports.
The Chinese investor will inject €14.4 million into the company in exchange for 49% of the company’s economic rights and the right to a possible dividend. The shares of other shareholders, including a 49% share currently held by another Chinese investor, Hongyuan logistics group, will be significantly diluted.
In order to operate under the flag of an EU country and operate in European airspace, airlines must ensure that the majority of shareholders are European. Therefore, a 49% stake is the largest possible amount that can be held by a non-EU stakeholder.
The new largest shareholder will join Hongyuan, Wallonie Entreprendre (Walloon Region), Federal holding and Investment Company, Sabena Aerospace, and CEO Niky Terzakis’ own stake in the management of the company.
The financial fate of the Belgian airline, which regularly transports Belgian dignitaries on international missions abroad and offers tourism destinations outside of Europe, has been hanging on a string for several years.
In December 2022, the airline managed to raise an additional €10 million needed to meet its financial obligation for the year ahead. As previously reported, the company entered into emergency talks with its shareholders to secure funding.
The Walloon Government was unwilling to pump more funds into the ailing airline. In 2022, the airline suffered a €44 million loss following poor sales and the impacts of the war in Ukraine. Cost for the airlines jumped by over 40% to reach €229 million. The airline was forced to axe flights to many of its far-flung destinations as a result.
In July, the airline said that it expected to return to profitability in the third quarter of this year. The company is headed by aviation industry veteran Niky Terzakis, who previously served as CEO of TNT Cargo Airways, Pan Air, and as a representative of the aviation industry to the European Commission.
