Air France-KLM is seeking an additional EUR6 billion euros (USD7.1 billion) to secure its future and is discussing the issue with its two government shareholders and other investors, unnamed sources told Le Monde on November 17.
The group has already received state-secured Covid-related bailouts amounting to EUR10.4 billion (USD12.3 billion). On top of that, according to the sources, France may provide a further EUR3 billion (USD3.55 billion) to Air France (AF, Paris CDG) and the Netherlands EUR1 billion (USD1.18 billion) to KLM Royal Dutch Airlines (KL, Amsterdam Schiphol), while the group as a whole wants to raise EUR2 billion (USD2.37 billion) in hybrid debt on the markets in the first quarter of 2021.
Hosting a press conference on unrelated issues on November 18, French government spokesman Gabriel Attal was asked about the report. He commented that Paris would continue to back Air France-KLM as it struggles with the slump in travel demand.
“The state has always strongly supported Air France since the beginning of the crisis,” he said, adding that communication between the company and France’s finance ministry was ongoing.
The country’s finance minister, Bruno Le Maire, has himself stressed over the last week that the government is prepared to offer more assistance.
Recontainment measures adopted across Europe in recent weeks have shredded hopes of a continued resumption of operations in the run-up to the Christmas holidays, which Le Monde described as a severe blow for the company.
Air France-KLM had previously anticipated, despite the crisis, “growth potential of 21% between November 2020 and February 2021” on routes to the West Indies and Reunion. Recent news about several Covid-19 vaccines has prompted the Air France-KLM share price to skyrocket by almost 30%, but the months ahead will be difficult.
Earlier, Air France had predicted that operations in December would be only 20% lower than the same month in 2019, but it now expects a decline of 60%, an Air France management source admitted to Le Monde, adding: “Recovery scenarios must be revised downwards and the short- and medium-term outlook is not encouraging.”
A union leader told the daily: “We are getting closer to the amount of losses that we experienced during the first phase of the epidemic,” adding that the company could be losing EUR15 million (USD17.8 million) per day. According to another union representative, the carrier’s flights are on average only 30% full, the only consolation being the performance of cargo, which now brings in 48% of the income from long-haul flights.
EUR7 billion in state aid provided to Air France as part of the earlier bailouts is “melting like snow in the sun,” said Christelle Auster, general secretary of the National Cabin Crew Union (Syndicat National du Personnel Navigant Commercial - SNPNC), and by spring 2021 the coffers would be empty.
Air France was not immediately available for comment.
