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EU APPROVES €4B AID TO AIR FRANCE WITH STRINGS ATTACHED
- By The Financial District
- Apr 7, 2021
- 1 min read
The European Commission has approved a plan for France to provide up to €4 billion in aid to Air France, which has suffered from the collapse of passenger traffic due to the coronavirus pandemic.
The French state will increase its stake in the airline to “just under 30%,” French economy minister Bruno Le Maire announced on Tuesday, up from its current 14.3% holding, Euronews reported early on April 7, 2021.
As part of the deal, to ensure state aid isn’t giving the company an unfair advantage over its competitors, Air France will give slots at Paris Orly airport to competing airlines, EU Competition Commissioner Margrethe Vestager explained in a statement.
Other “strings attached” include bans on dividends, share buybacks, and bonuses for executives, and a commitment to publish information on how the aid has been used, including how it supports obligations linked to the EU’s green and digital transformation.
Last year, Air France got €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, said it was essential to save the national carrier.
Margrethe Vestager, who is in charge of the Commission’s competition policy, said: “France will contribute up to €4 billion to reinforce Air France's equity and help the airline face financial difficulties resulting from the coronavirus outbreak.
At the same time, the public support will come with strings attached, in particular, to ensure the French state is sufficiently remunerated, and further measures to limit distortions of competition.
