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Brussels approves €7bn Air France-KLM Covid-19 bailout

A €7 billion state bailout of Air France-KLM has won the green light from Brussels.

The European Commission approved the French government financial support for the carrier under EU state aid rules.

The carrier is also seeking an aid package of between €2 billion and €4 billion from the Dutch government.


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The Commission found that Air France would likely face the risk of bankruptcy due to the sudden erosion of its business in the absence of the public support.

This would likely cause “severe harm” to the French economy.

Air France has suffered a “significant reduction” of its services, which resulted in high operating losses as a result of travel restrictions imposed by France and many countries to limit the spread of the coronavirus.

Approving the French aid package, Margrethe Vestager, in charge of EU competition policy, said: “The aviation industry is important in terms of jobs and connectivity.

“In the context of the coronavirus outbreak, Air France has also been playing an essential role in the repatriation of citizens and for the transport of medical equipment.

“This €7 billion French guarantee and shareholder loan will provide Air France with the liquidity that it urgently needs to withstand the impact of the coronavirus outbreak.

“We have co-operated closely with France, as with many other member states, to ensure that public support to tackle the current crisis can be put in place as quickly and effectively as possible, in line with EU rules.

“France has also announced plans for certain green policy choices as regards Air France.”

Ryanair chief Michael O’Leary has attacked state aid for ailing European flag carriers as “unlawful and discriminatory” and warned of a potential legal challenge against bailouts.


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