EU approves $4.7 billion in state aid to carrier Air France
The European Union has approved $4.7 billion in state aid for national carrier Air France as it struggles through the economic impact of the COVID-19 pandemic
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The European Union has approved $4.7 billion in state aid for national carrier Air France as it struggles through the economic impact of the COVID-19 pandemic, a decision the French government welcomed as “good news.”
In return for the aid, the carrier has promised to make slots available to competitors at the busy Orly airport in Paris. “The public support will come with strings attached,” said EU Commission Vice President Margrethe Vestager
Last year, Air France got 3 billion euros in direct loans from the French state, which will be converted into bonds as part of a recapitalization of up to 4 billion euros ($4.7 billion). In exchange, the government set conditions of profitability and more environmentally sustainable, less polluting policies.
In addition, the French state will participate in the capital increase of the holding company for the Air France-KLM airline alliance, to hold up to 29.9% of capital of the group, the French and Dutch governments said in a joint statement. The French state now holds 14.3% of the shares.
France and The Netherlands reaffirmed they are not considering nationalizing the group.
“This is good news for Air France and good news for the French,” Le Maire said on France Inter radio on Tuesday. Air France will give up 18 takeoff and landing slots — about 4% of its slots — at Paris-Orly airport, he detailed.
The French government, the airline’s largest single shareholder, has said it was essential to save the national carrier. Air France-KLM expects an operating loss of about 1.3 billion euros ($1.5 billion) for the first quarter of 2021.
“These first recapitalization measures are an important milestone for our group in this exceptionally challenging period,” said Air France-KLM CEO Benjamin Smith in a statement. “They will provide Air France-KLM with greater stability to move forward when recovery starts, as large-scale vaccination progresses around the world and borders reopen.”
KLM said in a statement that the company “will also need capital" and that the Dutch state is in talks with Brussels for that purpose. Tn 2020, the Dutch state supported KLM with a 1 billion-euro ($1.18 billion) loan.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.