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France and Netherlands pledge €11 billion in ’emergency aid’ to Air France-KLM

France and Netherlands deliver €11 billion in ’emergency aid’ to Air France-KLM
France and Netherlands deliver €11 billion in 'emergency aid' to Air France-KLM
The government of France said that it will provide €7 billion in emergency COVID-19 aid to Air France-KLM. The Dutch national flag carrier, KLM, will also receive up to €4 billion from the government of the Netherlands.

Dutch Finance Minister Wopke Hoekstra announced that the KLM aid package of up to €4 billion ($4.32 billion) will likely come as a combination of state guarantees and bank loans. The airline has been hit hard by the COVID-19 crisis and the majority of its planes remain grounded.

The announcement came shortly after Paris pledged €7 billion to Air France, KLM’s parent company.

“Air France’s planes are grounded, so we need to support Air France,” French Finance Minister Bruno Le Maire stated.

The French aid package will come in the form of a direct €3 billion loan from the state, and a €4 billion loan provided by a consortium of six French and international banks. Ninety percent of the second loan will be guaranteed by the state as well.

The Covid-19 aid will come with certain conditions, including that Air France must become the most environmentally friendly company on the planet,” Le Maire noted.

The airline industry has been devastated by the COVID-19 pandemic, as demand for passenger travel plummeted amid lockdowns and travel restrictions imposed by nations around the world.

The Air France-KLM group is no exception, and shares of the company have dropped by 55 percent so far this year.

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Chief Assignment editor is OlegSziakov