UPDATE - France Unveils $4.7Bln Aid For Air France After EU's Greenlight


UPDATE - France Unveils $4.7Bln Aid for Air France After EU's Greenlight

PARIS (UrduPoint News / Sputnik - 06th April, 2021) France will provide up to 4 billion Euros ($4.7 billion) in assistance to the pandemic-hit flag carrier Air France, the minister of the economy and finance said on Tuesday, after the European Commission approved the proposed rescue package following tense talks.

On Sunday, Paris announced that it had reached an agreement in principle with the European executive body on the financial support package. To allay the EU's antitrust concerns, the carrier will give up 18 take-off and landing slots at Paris Orly airport.

"We will convert 3 billion euros worth of long-term state aid for Air France into hybrid instruments," Minister Bruno Le Maire told France Inter radio.

The second part of the rescue package will see the state acquire the airline's shares.

"The state will participate in increasing the capital of the airline, it will be able to grow by up to 1 billion euros," the minister specified.

The move could allow the country to raise its stake Air France-KLM Group to almost 30 percent.

The Dutch government, meanwhile, announced that it would slash its share capital of Air France-KLM from 14 percent to 9.3 percent under the deal with the air carrier and France.

Finance Minister Wopke Hoekstra assured the parliament in a letter that the Netherlands would remain "a major shareholder and an important stakeholder."

"It is in the public interest of France and the Netherlands that airlines Air France and KLM will get through this crisis while focusing on its continued development and maintaining its position as a key player in the European aviation sector," Hoekstra wrote on Twitter.

Last year, Air France-KLM Group, the merger of the French and Dutch airlines, reported a 7.1 billion euro ($8.3 billion) loss as a result of the pandemic impact. The company has received several billion euros in state aid from France and the Netherlands to deal with the post-coronavirus shocks.