MIAMI – There are new developments on the feud going on between Air France-KLM Group (AF), the French government, and the European Commission on conditions from which a new recapitalization of the airline would be allowed.
According to the French newspaper Les Echos, the European Commission has mitigated its requests on the number of slots AF has to hand over at Paris-Orly (ORY) airport, as a counterpart to secure the EU approval on a recapitalization of the carrier, thus opening the way to an agreement between the parties.
Air France has already obtained more than US$12bm (€10bn) aid, out of which US$8.4bn (€7bn) direct or state-guaranteed loans plus US$4bn (€3.4bn) from the Dutch government. AF is partly owned by the French and Dutch governments which respectively hold 14.3% and 14% of shares.
The repeated aid stems from the negative results and losses brought forward by the COVID-19 crisis affecting the air transport industry, with the exception of freight activities that have been less negatively hit.
Harsher Conditions Initially Imposed
Initially, the EU Commission on Competition had requested AF to shed 14 pairs of slots daily, which equals 8,700 aircraft rotations per year, or 7% of the 125,000 slots held by AF at ORY. The request by the EU Commission was contested by protests both by AF CEO, Benjamin Smith, and several French unions ulcerated by the EU intention to allow more foreign competition at ORY.
A similar request was also faced by KLM at Amsterdam-Schiphol Airport (AMS). The request for the slot handover is similar to the one the EU Commission requested to Lufthansa (LH). However, the LH request was divided between the airline’s slots in Frankfurt (FRA) and Munich (MUC).
The terms and conditions of the new agreement are not yet made public, awaiting the approval of the AF-KL board but according to the French Airmag website, AF would have to shed fewer slots and be allowed to split the handover between ORY and CDG airports.
Featured image: Air France Airbus A350-900 F-HTYD – Photo : Tony Bordelais/Airways