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The European Union’s competition watchdog on Monday approved French state aid worth $7.66 billion for Air France, saying the support would provide cash to soften the economic shock of the coronavirus pandemic.

Airlines across Europe have sought state rescues as coronavirus lockdowns have forced them to ground their fleets for more than a month, with no end in sight.

“This €7 billion ($7.66 billion) French guarantee and shareholder loan will provide Air France with the liquidity that it urgently needs to withstand the impact of the coronavirus outbreak,” the EU’s top competition official Margrethe Vestager said in a statement.

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The European Commission noted the importance of Air France, with more than 300 planes, to the French economy and the role it has played in repatriating stranded citizens and transporting medical supplies.

The Commission said in its statement that the support will take the form of a state guarantee on loans and a subordinated shareholder loan to the company by the French state.

The French and Dutch governments each hold close to 14% of the Air France-KLM group, which was created by the 2004 merger between the two national carriers.

(Reporting by Gabriela Baczynska and Robin Emmott, editing by Ed Osmond and Barbara Lewis)

This article was from Reuters and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Photo Credit: Air France is to receive state aid worth $7.66 billion to soften the economic shock of the coronavirus pandemic. Vincent Genevay / Unsplash