China News Agency, Brussels, April 6 (Reporter De Yongjian) On the 6th, the European Union formally approved the French government's rescue plan for Air France, allowing the French government to inject 4 billion euros into Air France for asset restructuring.
The European Commission stated in an announcement that day that according to the plan submitted by the French government, the 4 billion euros are divided into two parts. The first is to convert the 3 billion euros loan that the French government has allocated to Air France into a hybrid capital instrument, and the second is France. The government will directly inject capital into Air France by subscribing for new shares, up to a maximum of 1 billion euros.
The announcement shows that the European Union has also attached a package of conditions to the reorganization of Air France’s assets, including Air France’s need to reduce its holdings of flight time resources at Orly Airport, the second largest airport in Paris, in order to provide opportunities for competitors to expand their business at Orly Airport. Strictly limit the salary of Air France management, including not granting bonuses to the management during the rescue period, and the French government must also formulate a timetable for withdrawing from the rescue plan.
The announcement quoted the European Commission’s executive vice-president in charge of competition, Vestagg, as saying that the French government intends to inject 4 billion euros to help Air France tide over the difficulties, but it must take further measures to prevent distortion of competition; Air France agreed to reduce its holdings at Orly Airport. It is believed that the resources of flight take-off and landing time will bring opportunities to competitors and ensure that European consumers can obtain reasonable fares and more choices.
As the "leading boss" of the French aviation industry, Air France merged with KLM in 2004 to form Europe's largest aviation group Air France-KLM Group. After the outbreak of the new crown pneumonia last year, the group's operations were in trouble. According to statistics, it will lose 7.1 billion yuan in 2020. Euros will lose another 1.3 billion Euros in the first quarter of this year.
In May last year, the European Union approved the French government to provide 7 billion euros of emergency liquidity assistance to Air France, including 4 billion euros state-guaranteed loans and 3 billion euros direct government loans, and subsequently approved the Dutch government to provide 24 100 million euros of state-guaranteed loans and 1 billion euros of direct government loans, according to which the Air France-KLM Group received 10.4 billion euros in emergency liquidity assistance.
Fearing that market competition will be distorted, the EU has always been very vigilant about “state aid”, but after the outbreak of the new crown pneumonia, the EU had to relax its review standards and allow member governments to bail out companies through funding, tax cuts, and guarantees. Except for Air France and KLM, the European Union approved the German government’s rescue plan for Lufthansa last June, allowing the German government to inject 9 billion euros into Lufthansa’s rescue.
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