parPar Toby Sterling et Laurence Frost
AMSTERDAM / PARIS (Reuters) – The Dutch government has concluded an agreement with France to contribute 3.4 billion euros (3.8 billion dollars) to an Air France-KLM
a bailout that had strained relations between state shareholders of the airline, sources told Reuters.
According to the agreement, the Netherlands will provide loans and direct guarantees to KLM and will appoint a director to its board of directors, two people familiar with the matter said.
Air France-KLM and the French Ministry of Finance declined to comment, but the Dutch Ministry of Finance later announced a press conference on Friday morning to “detail the financial aid plan for KLM”. A press release published briefly on the group’s website also mentions its value of 3.4 billion euros.
The governments, which each hold around 14% of Air France-KLM, unveiled € 7 billion in French aid in April and € 2-4 billion planned from the Netherlands, while the coronavirus crisis has practically stopped air transport.
Dutch funds were blocked by parliamentary scrutiny and tense negotiations in which France rejected The Hague’s requests for a voting seat on the KLM board, which would have weakened the group’s grip on its Dutch subsidiary .
Instead, the deal would involve the appointment of a non-voting government observer to ensure that the taxpayer bailout money is kept strictly for KLM operations, the sources said.
The French and Dutch governments remain at odds over the management and strategy of Air France-KLM, created by the 2004 merger between the two national carriers.
Frustrations exploded in March of last year with the surprise acquisition by the Dutch state of a stake in the group, intended to equal France’s stake and counter its weight.
Prior to the pandemic, a specially convened intergovernmental group had reported no progress on issues such as Dutch demands for board seats and greater autonomy for KLM from its original group.
But the KLM aid deal could also resolve part of the impasse, sources said after the subject was raised this week between French President Emmanuel Macron and Dutch Prime Minister Mark Rutte.
The Dutch aid package should also be accompanied by environmental conditions and restrictions on executive salaries demanded by legislators.
(Reporting by Toby Sterling and Laurence Frost; additional reporting by Anthony Deutsch; Editing by Edmund Blair, Kirsten Donovan, Dan Grebler and Lincoln Feast)