The bailouts provided to Air France-KLM by the French and Dutch governments will allow the airline to continue flying for less than a year, its CEO Benjamin Smith said on Monday and raised the possibility of injecting new capital.In an interview with the French daily l’OpinionSmith also warned that calls for airlines to do more to help tackle climate change could be catastrophic for their survival, already at risk from the coronavirus pandemic.
When countries imposed lockdowns earlier this year to stem the spread of the coronavirus, airlines faced steep revenue cuts that demanded multiple carriers.
A number of countries have provided support, including France which provided 7 billion euros ($ 8.2 billion) to Air France and the Netherlands which received a package of 3.4 billion euros. .
“This support will allow us to last less than 12 months,” said Smith.
The reason is that air traffic is increasing very slowly as many countries in the northern hemisphere now fear a second wave of infections.
“If we look at the last few weeks, it’s clear that the resumption of traffic will be slower than expected,” according to Smith, who said when the bailout was put in place, the airline was not expecting to a return to 2019 levels than in 2024..
Smith said discussions were already underway with shareholders about strengthening the airline group and that action would be taken before the next regular annual meeting in the second quarter of next year.
“One, three or five billion euros? It is too early to quantify a possible recapitalization, ”he said.
The airline group had € 14.2 billion in cash or lines of credit.
Major shareholders include the French government with a 14.3% stake, the Dutch government with 14%, as well as the airlines Delta and China Eastern which each hold an 8% stake.
Governments are under pressure to tie airline bailouts to environmental commitments.
A proposal resulting from a citizens’ convention convened by President Emmanuel Macron would cost airlines around 4.2 billion euros.
Smith said imposing environmental charges on the industry would be “irresponsible and catastrophic” for Air France-KLM.