Covid-19 Could Lead To An Air France-KLM Breakup

Could the Covid-19 Crisis Lead To An Air France-KLM Breakup?

THE Air-France-KLM Group has managed to secure crucial funding as it tries to survive through the global health crisis. However, with the two arms of the holding company relying on their respective governments for aid, their relationship could be getting more complicated.

Air France-KLM has been in talks with French and Dutch governments regarding aid measures that would enable the company to maintain solvency. The French government has now finalised a relief package for the company for a total of up to €7 billion.

A French state-backed loan of €4 billion granted by six banks; this loan is guaranteed up to 90 per cent by the government, and has a maturity of 12 months, with two consecutive one-year extension options.

A shareholder’s loan of €3 billion from the French state has also been approved which has a maturity of four years, with two consecutive one-year extension options. The Dutch government also plans to provide €2-4 billion worth of support, though it’s expected that this will come with some conditions.