MIAMI – In June, the European Commission approved a €4bn (US$4.7bn) bailout of Air France (AF). The recapitalization was, according to the EU, to “reinforce Air France’s equity and help the airline face financial difficulties resulting from the coronavirus outbreak.” The funding came primarily from France giving the French Sate just under a 30% equity stake in the airline.

However, that aid did not come without some strings attached.

Air France has had an overbearing presence and lock on the gates at Orly Airport in Paris (ORY). This presence paralyzed the ability of other airlines to compete. Now, in light of the public aid received, the EU ordered that AF cede 18 gates to other airlines. This “gives competing carriers the chance to expand their activities at this airport, ensuring fair prices and increased choice for European consumers,” according to European Competition Commissioner Margrethe Vestager.

Vueling Airbus A320neo aircraft
Vueling Airbus A320neo lining up at Milan Malpensa (MXP) – Photo: Alberto Cucini/Airways

Vueling Flying to Orly

Reuters now reports that the beneficiary of this deal will be Vueling (VY), the Spanish low-cost airline based at El Prat de Llobregat (BCN) in Greater Barcelona. Vueling also has a hub at Leonardo da Vinci–Fiumicino Airport (FCO) in Rome, Italy.

Vueling will take over 18 daily slots at ORY. Flights will start in November, according to Reuters.

“Brussels was (originally) asking for 24 slots. It was too much, it would have weakened Air France and it would have been counterproductive. We negotiated well,” said Europe 1 in the cabinet of Bruno Le Maire.

According to Teller Report in April, mechanisms are in place that will encourage AF and its holding company to buy back France’s equity investment that resulted from this injection of capital.

Air France currently holds 300 daily slots at ORY, a good majority of the airport’s schedule. This allows the airline to fly 125,000 flights per year.

Featured image: Javier Rodriguez/Airways