Air France-KLM secures a 10 billion euro bailout as coronavirus arrives on a trip

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PARIS – France and the Netherlands will provide an unprecedented 10 billion euro bailout funded by taxpayers, or about $ 10.8 billion, to save Air France-KLM as the fallout from the coronavirus on the industry of travel impose a devastating toll on global air carriers.

Air France-KLM, one of the largest European airlines, will receive a bank loan of 4 billion euros supported by the French state and a direct public loan of 3 billion euros, announced Friday the Minister of Finance, Bruno Le Maire. The Dutch government has said it will provide additional public aid of between 2 and 4 billion euros.

The infusion of aid is far from nationalizing the company, in which the French and Dutch states each hold a 14% share. The European Commission – the executive branch of the European Union, which lifted restrictions on state support in a deep economic downturn – quickly approved the rescue plan.

It is the third multi-billion dollar lifeline extended last week by the French government to companies hit by the coronavirus.

The state also last week supported a 500 million euro loan for the French giant of electronic distribution FNAC-Darty, which employs tens of thousands of people in France, to help it secure its cash flows. and prepare for recovery from the pandemic.

Flights across Europe have dropped 90%, and most carriers don’t expect service to resume until June. The deployment of air traffic may depend on the introduction of government-imposed social distancing measures inside airplanes, the air transport association said.

Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, United Airlines, SkyWest Airlines and Southwest Airlines will participate in the rescue plan, which is part of an economic stabilization plan adopted by Congress last month.

German airline Lufthansa said on Thursday it would demand government bailouts after the drop in sales, which caused a loss of more than a billion euros in the first quarter, and investors are no longer willing to lend money to society. Passenger traffic has fallen to almost nothing and the second quarter will be even worse, Lufthansa said in a statement.

Norwegian Air Seeks Credit Support For Rescue Plan That Would Convert Up To $ 4.3 Billion Debt To Equity And Increase Equity After Last Month Announcing Temporary Layoffs Of About 7,300 Employees 90% of its workforce, and asked for help from the Norwegian government.

Air France, in which the government holds a 14% stake, has put its employees on part-time leave for six months, in accordance with a request from the government not to dismiss workers. The carrier has lost about 25 million euros a day since then, plunging it into a critical financial situation.

With almost all of the company’s planes immobilized, the financial lifeline is needed “to save the 350,000 direct and indirect jobs that go with it,” said Maire.

The support “is not a blank check,” Le Maire said on Friday, adding that governments have set profitability conditions for the carrier.

“This is French money, so the company has to make an effort to be more profitable,” he said. The company will also have to become “the most environmentally responsible company on the planet,” he added.

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