EU approves €7 billion state support for Air France
Monday, 04 May 2020
The European Commission has authorised France to pour €7 billion into Air France to support it through the coronavirus crisis, the Commission reported on Monday.
“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,” said European Competition Commissioner Margrethe Vestager.
“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,” Vestager said.
French Economy Minister Bruno Le Maire had announced the loan at the end of April, adding that nationalisation was not on the agenda. The aid breaks down into 4 billion in state-guaranteed bank loans and 3 billion in direct state loans. “We must save our national company,” the minister said.
“With respect to the State-backed guarantees, France submitted an individual notification because the guarantee provides greater loan coverage (90%) than under the French general guarantee scheme approved by the Commission on 21 March 2020 (70% loan coverage),” the Commission said.
“The Commission concluded that the measure will contribute to managing the economic impact of the coronavirus in France,” the Commission clarified. “It is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the Temporary Framework.”
Air France is not the only airline in need of state aid due to the new coronavirus (Covid-19). Austrian Airlines and Brussels Airlines, both owned by Lufthansa, are in talks with their governments, though talks concerning Brussels Airlines are reportedly on hold. The US government has put nearly $6 billion aside for American Airlines.