The European Commission on Tuesday approved a French proposal to grant up to 4 billion euros ($4.72 billion) to recapitalize Air France KLM as it battles the economic impact of the COVID-19 pandemic measures. 19.
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 in direct loans from the French state as part of a recapitalization of up to €4 billion.
The French government, the airline’s largest single shareholder, has said it is essential to save the national carrier, but it has no plans to nationalize Air France.
The European Union executive, meanwhile, has said France will have to come up with an exit strategy for the airline within 12 months unless it has reduced state participation to less than 25% by then.
He said Air France KLM will be prohibited from paying dividends, non-mandatory coupon payments, making share buybacks and paying management bonuses until the recapitalization is repaid.
In exchange for the bailout, the government set conditions for profitability and more environmentally friendly and less polluting policies.