EU approves 7 billion euro Air France bailout due to Covid-19 crisis
The European Union's competition authority has given the green light for a seven billion euro French bailout to help Air France deal with the economic fallout caused by the coronavirus pandemic.
“This seven billion euro French guarantee and shareholder loan will provide Air France with the liquidity that it urgently needs to withstand the impact of the coronavirus outbreak,” according to the statement by EU’s top competition official Margrethe Vestager.
International carrier Air France continues to fly, according to a statement put out last week, but only at five percent of its capacity before the coronavirus outbreak that caused countries to close borders and stop most flights, both domestic and international.
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The French carrier, with a fleet of 300 planes, continues to serve three French cities (Toulouse, Marseille and Nice), 15 European cities, and 20 countries around the world. These flights are earmarked for emergency medical or family reasons, and for cargo transport, including medical equipment and food.
“More than 270,000 people, including 155,000 French nationals, have been repatriated,” according to the Air France statement.
The European Commission said it took this work into account when making the decision.
Air France is not the only air carrier seeking state rescues as some airlines have had to ground their fleets for more than a month, without an idea of when they will be able to fly again.
The support will include a state guarantee on loans and a subordinated shareholder loan to the company by France.
The money is contingent on the carrier reducing pollution, but green groups such as Greenpeace protested last week regarding the lack of transparency in enforcing environmental standards.
Both the French and Dutch governments retain close to 14 percent of the Air France-KLM group, resulting from a 2004 merger between the two.
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