Air France to give up 18 Orly slots under €4B French recapitalization plan – POLITICO



Air France won EU approval for a €4 billion recapitalization plan by the French government after agreeing to conditions including giving up airport slots.

Under the plan, France could increase its stake in the flagship carrier’s holding company to near 30 percent from the current 14.3 percent.

The European Commission forced the airline to surrender 18 of its prized daily slots — takeoff and landing rights — at the congested Paris Orly airport, where it holds significant market power. Other conditions are designed to ensure that the French government gets sufficiently remunerated and that Air France and its shareholders do not unduly benefit from the operation.

“This gives competing carriers the chance to expand their activities at this airport, ensuring fair prices and increased choice for European consumers,” EU Commissioner for Competition Margrethe Vestager said in a statement.

The travel restrictions introduced by France and by many destination countries to limit the spread of the coronavirus have caused Air France and its holding company to suffer “major operating losses,” the Commission said.

The €4 billion recapitalization package comprises the conversion of a €3 billion state loan — already approved by the Commission in May 2020 — into a hybrid capital instrument and a new capital injection by France through the subscription in a share capital increase opened to others.

“The French State does not intend, through this operation, to hold more than 29.9 percent of the share capital of Air France-KLM nor to take control of Air France-KLM,” the French and Dutch governments said in a joint statement. The Dutch government, meanwhile, will investigate “the conditions under which a KLM recapitalization could take place and a potential intervention of the Dutch State in such recapitalization,” according to the statement.

French Economy Minister Bruno Le Maire said on France Inter that the package “marks a strong commitment of the state for Air France, for its employees and to guarantee the sustainability of a strategic firm for the French nation.”

Air France has a fleet of over 300 planes and is owned by the Air France-KLM group, in which the French government has a 14.3 percent stake.

Germany agreed to similar conditions for its carrier Lufthansa last year, including the divestment of up to 24 lucrative slots at the Munich and Frankfurt airports. Vestager described that remedy package as a precedent for future state aid for airlines.





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