Air France-KLM will receive up to 4 billion euros and the French government could increase its stake up to 30% as part of a plan to recapitalize the indebted carrier hit by the pandemic.
Air France will obtain up to € 1 billion in new capital as part of a shareholder subscription and will convert a previous French loan of € 3 billion into hybrid instruments, according to a statement released Tuesday by the European Commission. In exchange, Air France will have to cede 18 daily slots at Orly airport outside Paris.
The French government could become the airline’s main shareholder under the plan, French Finance Minister Bruno Le Maire told France Inter.
The long-awaited package has been the subject of sometimes tense discussions between Air France-KLM’s main shareholders – France and the Netherlands – and the European Commission, which has asked for a series of conditions to offset antitrust concerns. Last year, governments granted the group a total of € 10.4 billion in direct loans and state-backed guarantees.
France’s aid will only benefit the French branch of Air France-KLM, the EU has said.
France had sought to relax the commission’s demands for measures to boost competition within the industry, including the cession of coveted landing rights at Orly and Amsterdam Schiphol airports. – Bloomberg