Article from BTNews 4 MAY 2020
Air France and the future
More details have emerged of the French Government bailout of Air France-KLM.
Whilst each country owns around 14% of the airline the French loan is €7.6bn, and the Netherlands €2.4bn with strings attached. Air France (AF) is a mixture of domestic and international flights, whilst KLM only serves destinations abroad. KLM is around two thirds of AF in terms of revenue.
“This support to Air France is not a blank cheque,” France’s economy minister Bruno Le Maire said in a video posted on Twitter 30 April, echoing the words of Air France-KLM CEO Ben Smith 24 April after the French state granted the funding. “We have held long negotiations and we have fixed conditions, with the first condition one of competitiveness,” Le Maire said. “Air France must make efforts to become more profitable and more competitive.”
The French Government called for a reduction in domestic services.
“Where there are rail alternatives to an internal flight of under two and a half hours, these internal flights should be cut drastically and in fact limited to transfers to a hub,” he said.
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