KLM Royal Dutch Airlines announced Saturday that the Dutch Government has pledged a state aid package worth between €2-€4 billion. Air France also announced funding of €7 billion with a €4 billion bank syndicate loan and a direct government loan of €3 billion.
Last weekend, KLM Royal Dutch Airlines announced that the Dutch Government has pledged between €2-€4 billion in state aid. Similarly, the Air France-KLM Group and Air France announced that they will receive €7 billion in aid consisting of a French State backed loan of €4 billion granted by a syndicate of six banks and a direct shareholder’s loan of €3 billion from the French Government. All the agreements are subject to approval from the European Commission. Last year, the Dutch government acquired a 14 percent stake in the Air France-KLM Group and the latest financial aid package reinforces their support for the company. In Saturday’s announcement, KLM’s President and CEO Pieter Elbers said,
“On behalf of all KLM’s employees, I would like to express my deep gratitude and appreciation for this strong and significant support from the Dutch government. KLM’s 30,000 highly committed employees want to continue to plan an important role in Dutch society in the future too, connecting the Netherlands to the world and the world to the Netherlands. The ministers highlighted KLM’s position as a major employer and its vital importance to the Dutch economy. KLM intends to lead the field in its ambitions and to play a pioneering role in sustainability. Air France and KLM are currently weathering a storm of unparalleled magnitude. The Dutch government has responded with aid on an equally unprecedented scale. The Netherlands can be assured of our total commitment to living up to the trust that has been placed in our company.”
A separate press release from the Air France-KLM Group detailed the terms of the private/public aid package supported by the French Government. As previously mentioned, the Group will receive a loan of €4 billion from a consortium of six banks. The French Government will guarantee 90 percent of the loan which has a maturity of 12 months and extension options of two one-year terms at the Group’s discretion. Additionally, the French Government will make a direct shareholder’s loan of €3 billion with a maturity of four years and an option for two consecutive one-year extensions. In the April 24, 2020 announcement, Air France-KLM Group’s CEO Benjamin Smith said,
“On behalf of our Group and its employees, I would like to thank the French state and our banking partners for their support in ensuring the future of the Air France-KLM Group. This aid, along with the Group’s action plan, will enable us to withstand this crisis and foresee the future of Air France-KLM with ambition and determination. We are a strong Group and we are united in face of this crisis. I would like to once again salute the exceptional commitment of our employees for their dedication to the repatriation of our fellow citizens, the transport of medical equipment and maintaining the essential links with territories.”
Source(s): KLM, Air France-KLM Group