Air France headquarters in Paris.
NICOLAS MESSYASZ / SIPA
A rescue plan which had to be validated by Brussels.
The European Commission has approved a plan by the French state to grant up to 4 billion euros in aid to Air France, to recapitalize the airline brought down by the pandemic and the collapse of passenger traffic.
The State will be able to double its participation in the company, announced Tuesday the Minister of the Economy Bruno Le Maire on France Inter.
It is the result of several weeks of negotiations between the French government and the European institution.
The State will be able to increase to 30% of the capital
The recapitalization of Air France provides for "the conversion of the State loan of 3 billion euros already granted by France into a hybrid capital instrument" as well as a "capital injection by the State" via an increase of capital "open to existing shareholders and to the market", within the limit of one billion euros, the European Commission said in a press release.
The French state will be authorized to increase to "a little less than 30%" of the capital of Air France, against 14.9% today, following the validation of the aid plan by the European Commission, indicated Bruno The mayor.
18 flight slots sold
In return, Air France will have to cede 18 flight slots to other companies at Paris Orly airport (i.e. 4% of its slots at Orly according to Bruno Le Maire), he said, adding to have obtained Brussels that companies which do social and fiscal “dumping” cannot recover.
"It's a good agreement for Air France and for the French," said the tenant of Bercy, who recalled that in return, the company must also make efforts to be more competitive.
Job losses and lower carbon emissions
“There is already a lot of work that has been undertaken by Air France, all of this is in the right direction.
There are difficult choices that have been made, in particular for the company Hop !, significant efforts that have been made by the employees.
We will have to continue in this direction, ”said the Minister.
In total, 8,500 FTE jobs must be eliminated by 2022 within Air France and Hop!
as part of the group's transformation plan.
The company will also have to "reduce its CO2 emissions per passenger and per kilometer by 50% by 2030".
In 2020, Air France has already received € 7 billion in state aid.
Losses in the first three months of 2021
Air France-KLM announced Tuesday forecast an operating loss of 1.3 billion euros in the first quarter of 2021. Its managing director Benjamin Smith judged that the public aid will bring him "greater stability to go from the before when the recovery begins ”.
The company says it has "a solid liquidity and lines of credit of 8.8 billion euros as of February 28, 2021", and still expects "a significant recovery in demand" this year.
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