Last year Air France KLM received $12.3 billion in government aid. Now the government of France will provide a new $4.7 billion in support, while the Dutch government is in talks with European regulators over an additional $1.18 billion.
In exchange for this new support Air France has to give up slots for 9 daily roundtrips at Paris-Orly airport.
The new aid to Air France is “a state-backed recapitalization,” converting loans from the government into “bonds with no maturity” along with additional capital through the issuance of new shares.
- This can take the French government’s stake in the airline up from 14.3% to 30%. France is already the largest shareholder in the airline.
- Chinese state-backed China Eastern “will also participate,” giving that country additional sway.
France’s finance minister justifies the re-nationalizes of the carrier because it is “too big to fail.” Air France was partially privatized in 1999.