Paris (AFP)

The French and Dutch states have promised massive aid to save Air France-KLM from the disastrous consequences of the coronavirus epidemic, with ten billion euros in direct or bank loans.

The French Minister of Economy Bruno Le Maire announced a total envelope of 7 billion euros for the airline, during an interview with the newspaper of 8:00 pm of TF1.

For Air France, these loans will be broken down into 4 billion bank loans guaranteed 90% by the state and 3 billion direct loan from the state, said Le Maire. "We must save our national company," he added, describing the plan as "historic".

However, he stressed that the nationalization of the company was "not on the agenda", when the option had been raised.

An hour later, Dutch Finance Minister Wopke Hoekstra promised 2-4 billion euros in public aid for KLM at a press conference in The Hague.

The French and Dutch states each own around 14% of the group.

"We are in the process of clarifying the details" of this support, he added.

In total, the Franco-Dutch airline group will be able to count on an envelope of 9 to 11 billion euros to overcome the historic crisis in the aviation sector, put on hold by the multiple travel restrictions imposed by authorities around the world. to curb the Covid-19 epidemic.

The two ministers issued a joint press release shortly after to ensure "sharing the same priority for Air France-KLM", namely to make tender "all efforts to respond to this unprecedented shock".

While almost all of its planes are grounded, Air France-KLM faces a critical situation. The measures announced Friday are taken "to save the 350,000 direct and indirect jobs that go with it," said Le Maire.

This support "is not a blank check", he however underlined. "We have set conditions for Air France. Profitability conditions, because it is French money, so Air France must make an effort to be more profitable, and ecological conditions. Air France must become the company most environmentally friendly airline on the planet. This is the condition I am most attached to, "he said.

- Breath of fresh air -

The airline of course welcomed this breath of fresh air. During a videoconference in the French Senate on Wednesday, the director general of Air France-KLM Ben Smith had deemed this public support "essential".

Group management then pointed out that Air France currently operates less than 5% of its regular flights, and KLM less than 10%.

Disarray is general in the sector, particularly struck by the consequences of the Covid-19 epidemic. In early April, the collapse of world traffic reached 80% compared to 2019 while the sector was still sailing recently on comfortable forecasts of a doubling of the number of passengers in 20 years with a growth rate of 3 to 4% per year .

Friday evening, Air France-KLM stressed that "this support mechanism, which remains subject to its approval by the European Commission, will allow the Air France-KLM Group to guarantee Air France the means to meet its obligations by continuing its transformation to adapt in a sector that the global crisis will greatly disrupt. "

Air France-KLM also indicated that it envisaged "an operation to reinforce its equity capital" which could take place "at the latest after the assembly of approval of the accounts for the financial year 2020".

"In this context, the French state has indicated its intention to examine the conditions of its participation in such an operation," added the press release from the Franco-Dutch airline.

Guillaume Schmid, of the SNPL, the first French pilots' union of the company, for his part cautiously took "note of aid which was essential to the survival of the company".

He welcomed the environmental compensation requested by the State but expects that the restructuring of the company will involve the short-haul Air France network, which is in deficit.

Christophe Malloggi, of FO Air France, the airline's first union, said to him "reassured in the short term, the crisis is very deep and the visibility of the recovery is unclear".

Sud Aérien declared for its part that it would have preferred a rise in the capital of Air France on the part of the State, the only action guaranteeing stability and confidence. "

© 2020 AFP