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France can help Air France with seven billion euros in the form of loan guarantees and a shareholder loan in the coronavirus crisis. The EU Commission today approved liquidity aid, among other things, noting that without the support of the state, the bankruptcy of the airline could be threatened. France has shown that all other options for raising money in the financial markets have been examined and exhausted.
A state guarantee of up to 90 percent has been approved for loans of up to four billion euros. The subordinated loan from the French State as a shareholder was approved in accordance with the rules of the EU treaty. State aid is possible if there would otherwise be a serious disruption to the entire economy of a member state, the EU Commission said.
The French state owns a 14.3 percent stake in the Air France-KLM group, one of the largest airlines in Europe with a fleet of more than 300 aircraft. Due to the pandemic, there are practically no more flights. “The Commission concluded that without public aid, Air France would likely be exposed to bankruptcy risk due to the sudden drop in business,” the agency said. “That would probably cause serious damage to the French economy.”
