In order to help Air France recover from the crisis caused by the coronavirus epidemic, Minister of the Economy Bruno Le Maire guaranteed on France 2 TV channel that the airline will get “massive support from the French State”. As a matter of fact, since the pandemic started, almost the entire Air France fleet has been pinned down since there’s almost no air traffic.
“Air France loses billions of euros per month. Air France doesn’t need just a push, it’s a massive support from the State. Air France will get this massive support from the State. We want to preserve this airline at all cost as it is a French industrial flower” the Minister of the Economy explained after saying earlier that day that France was “ready to replenish their fund and group Renault’s”.
On Friday April 24, the Minister of the Economy has announced the State will give Air France a 7-billion-euro support. This envelop will be divided. First, 4 billion euros of bank loans (secured at 90% by the State), and a stakeholder's advance from the State of 3 billion euros.
Yet, Bruno Le Mair has said that “the French government will make no decision as for an eventual nationalization without prior tight concertation with our Dutch partnership”. Indeed, 14.3% of Air France-KLM’s capital is held by the French State and 14% by the Dutch State. As for the Netherlands, they are committed to help KLM with 2 to 4 billion euros.
As an exchange with this major help for the airline, the State demands it to respect environmental criteria. The airline will have, for instance, to present a plan to lower the CO2 emissions, Bruno Le Maire.
This Monday May 4, the European Commission validated this aid from the State to Air France in order to provide "the cash flow it needs urgently to resist the consequences of the pandemic." "France also brough proof that all other possibilities to have cash flow on the markets were already surveyed and worn out" the European Commissioner for Competition Margrethe Vestager explains, saying that "if no public support if given, Ai France will be undoubtedly exposed to bankruptcy following the erosion of its activities. It would result in serious damage to the French economy".
As for Renault, also tormented, the government is thinking about a 5-billion-euro loan, according to the Ministry of the Economy.