French government vows to continue support for Air France despite €2.6 billion loss in 2nd quarter
The French state will continue its support for Air France "without ambiguity" even if more capital is required to save the national carrier from collapse, according to junior minister for industry Agnès Pannier-Runacher. Friday's statement comes just a day after the airline posted massive losses from April to June.
"There is nothing ambiguous," said Ms Pannier-Runacher on the LCI political news channel, "the State will be there to assist, because we believe having a national carrier is an essential part of our sovereignty."
Finance Minister Bruno Le Maire concurred with the announcement in a separate interview saying "yes, we must maintain a national airline."
€4.4billion in losses in 6 months
The announcements came as the Air France-KLM posted a loss of €2.6 billion for the second quarter of 2020, massively impacted by the collapse of air travel due to the Covid-19 pandemic, and follows a loss of €1.8billion over the first three months of this year.
When asked about the possible nationalisation of the carrier, the junior minsiter Pannier-Runacher repolied that that issue "was not on the table."
"What's at stake is finding out how to make Air France bounce back, and we will be there for [the company] and if we need to raise the capital, we will do so.. We're not leaving [that option] out, but it's not being tabled for now," she asserted.
Le Maire, for his part, has said that "the state will do everything necessary for the preservation of the national airline, the jobs that go with it and the independence that that represents.
"I believe that with the €7billion already agreed, Air France can make a come-back before the end of the year. But if at one monent or another, if air traffic doesn't resume as normal and the economic situation remains challenging, Air France can still count on the support of the State," assured the Finance Minister.
KLM says it can stay the course
France and the Netherlands own a 14% stake each in the Air France-KLM group.
This spring, Paris granted a €7billion bail-out for Air France in the guise of guarnteed loans, while the Netherlands also accorded a €3.4billion line of credit for KLM.
Conversely, in an announcement this Friday, the chief executive of Air France-KLM's Dutch arm said that the company would repay the €3.4 billion euros rather than seek fresh equity.
CEO Pieter Elbers said, "I read all the suggestions and the speculations about this, but we've agreed a loan with the government and banks. We are going to make a plan to make sure we pay off those loans."
However, despite the financial assistance, Air France is to cut some 7,580 jobs between now and the end of 2022, while upto 5,000 job losses are expected at KLM.
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