By RAF CASERT and SYLVIE CORBET, Associated Press

BRUSSELS (AP) — The European Union has approved $4.7 billion in state aid for national carrier Air France as it battles the economic impact of the COVID-19 pandemic, a decision that the French government hailed it as “good news”.

In exchange for the help, the carrier promised to make slots available to competitors at the busy Orly airport in Paris. “Public support will come with strings attached,” said European Commission Vice-President Margrethe Vestager.

Last year, Air France secured 3 billion euros in direct loans from the French state, which will be converted into bonds as part of a recapitalization of up to 4 billion euros ($4.7 billion) . In exchange, the government sets conditions for profitability and policies that are more respectful of the environment and less polluting.

In addition, the French State will participate in the capital increase of the holding company of the Air France-KLM airline alliance, to hold up to 29.9% of the capital of the group, indicated the French and Dutch governments in a joint statement. The French State now holds 14.3% of the shares.

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France and the Netherlands have reaffirmed that they have no plans to nationalize the group.

“This is good news for Air France and good news for the French people,” Le Maire told France Inter radio on Tuesday. Air France will give up 18 take-off and landing slots – around 4% of its slots – at Paris-Orly airport, he explained.

The French government, the airline’s largest single shareholder, said it was essential to save the national carrier. Air France-KLM expects an operating loss of around 1.3 billion euros ($1.5 billion) for the first quarter of 2021.

“These first recapitalization measures are an important step for our group in this exceptionally difficult period,” Benjamin Smith, CEO of Air France-KLM, said in a press release. “They will provide Air France-KLM with greater stability to move forward when the recovery begins, as large-scale vaccination progresses around the world and borders reopen.”

KLM said in a statement that the company “will also need capital” and that the Dutch state is in talks with Brussels for this purpose. In 2020, the Dutch state supported KLM with a €1 billion ($1.18 billion) loan.

Corbet brought back from Paris. Mike Corder contributed reporting from The Hague, Netherlands.

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