The French and Dutch governments announced at least 9 billion euros ($9.7 billion) in bailout money Friday to rescue Air France and KLM, whose planes have been largely grounded by virus lockdowns around the world.
The partner airlines had been in negotiations for weeks with their respective governments, as carriers worldwide are collapsing or seeking government bailouts. The past several weeks of travel restrictions have upended the entire industry, and Air France and KLM said earlier this month that they expect their joint traffic to be down more than 90% in the coming months.
Air France will get 3 billion euros in direct loans from the French state and a 4-billion-euro bank loan guaranteed by the state, the airline said in a statement.
Speaking on national television TF1, French Finance Minister Bruno Le Maire said the aid was necessary to “save our national airline.” He said the government is not currently considering nationalizing Air France.
In exchange for the bailout, Le Maire said the government would set conditions of profitability and more environmentally sustainable, less polluting policies.
In the Netherlands, Dutch Finance Minister Wopke Hoekstra announced the government will provide 2-4 billion euros ($2.16-4.32 billion) to help flag carrier KLM survive the devastating impact on its operations of the coronavirus crisis.
Hoekstra said Friday night the money would likely be in the form of guarantees and loans to the carrier.
He said the government was coming to KLM’s rescue “because of the vital importance that this business, combined with (Amsterdam airport) Schiphol, has for the Dutch economy and employment.”
KLM “is the first domino at the start of a long row. If KLM falls, it doesn’t just have consequences for the company and its staff but for all the (dominoes) that follow. For Schiphol, for ground staff” and other businesses reliant on international aviation links, Hoekstra said.
The Dutch minister said the support would come with strings attached. “It’s tax money from us all and that means we will ask for something in return.”
Air France-KLM Chief Executive Ben Smith hailed the “unparalleled vote of confidence.”
The company would have run out of cash “in the very near future” without this help, he said. He promised the company would “rethink our model immediately” to stay competitive once virus confinement measures start allowing more air travel.
KLM CEO Pieter Elbers announced earlier this week he was giving up 20% of his salary this year as the airline fights for its survival.
The French government is also considering a 5-billion-euro loan guarantee for carmaker Renault, Le Maire said.
Corder reported from The Hague, Netherlands.
This article was written by ANGELA CHARLTON and MIKE CORDER from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to firstname.lastname@example.org.