[Asia Economy Reporter Park Byung-hee] The French and Dutch governments are expected to provide tens of billions of euros in additional funding to the airline Air France-KLM, which recorded massive losses last year due to COVID-19.
Bloomberg reported on the 28th (local time) that an official announcement is expected within days once the European Union (EU) Commission and the Air France-KLM board of directors approve it. The French and Dutch governments hold a 28% stake in Air France-KLM.
Air France-KLM recorded a net loss of 7.1 billion euros last year due to the COVID-19 crisis. The French and Dutch governments had already provided a total of 10.4 billion euros last year through direct loans and government guarantees. However, last month Air France-KLM announced that its cash holdings decreased again in the fourth quarter of last year. As of the end of last year, Air France-KLM's net debt stood at 11 billion euros.
Since deciding on support last year, the French and Dutch governments have been reviewing additional aid and are reported to have been negotiating with the EU Commission for several months. The EU Commission examined whether the government support would hinder fair competition.
As a condition for this government support, Air France-KLM is expected to cede some flight frequencies on routes operating from France's Orly and the Netherlands' Schiphol airports to other airlines.
Previously, the German airline Lufthansa, in exchange for government support last year, ceded some routes from Munich and Frankfurt to other airlines.
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