EU approves 7-billion-euros worth of loans for Air France amid COVID-19 pandemic
Updated: May 5
An Air France Airbus A320 at EGLL. Photo by Karam Sodhi | AeroNewsX
Air France, on the verge of bankruptcy as a result of the ongoing pandemic, is set to receive loans totaling €7 billion (US$7.66 billion) to help soften the economic blow it will inevitably face. The European Commission, the executive branch of the European Union (EU) has announced that the funds would “provide urgent liquidity to the company in the context of the coronavirus outbreak.”
In a statement, EU’s top competition official Margrethe Vestager communicated that “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”. She also appreciated the efforts of the Paris-based carrier in the outbreak. The airline was operating repatriation and cargo flights for medical supplies despite canceling most of its regular-scheduled flights.
This comes after there were plans to secure 3 billion euros and a further 4 billion dollars in bank loans just last month. Both the French and the Dutch governments hold an equal 14% stake in Air France-KLM.
With the coronavirus pandemic continuing to damage the aviation industry, many airlines have approached state governments to seek financial bailouts amid what could be the largest crisis the aviation industry has ever faced.