The European Commission Loans €7 Billion to Air France

Business » TOURISM | May 4, 2020, Monday // 16:46| Views: | Comments: 0
Bulgaria: The European Commission Loans €7 Billion to Air France www.pixabay.com

The European Commission has approved, under EU State aid rules, a €7 billion French aid measure consisting of a State guarantee on loans and a shareholder loan to Air France to provide urgent liquidity to the company in the context of the coronavirus outbreak. The measures were approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020, and directly based on Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU), respectively, the European Commission said in a press release.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “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. 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. We have cooperated closely with France, as with many other Member States, to ensure that public support to tackle the current crisis can be put in place as quickly and effectively as possible, in line with EU rules. France has also announced plans for certain green policy choices as regards Air France. Good. Member States are free to design measures in line with their policy objectives and EU rules.”

The French support measure to Air France

Air France is a major network airline operating in France. It is part of the Air France-KLM group, in which the French state holds a participation. With a fleet of over 300 planes, Air France is a very important company for the French economy, in terms of employmentand connectivity for many French regions including those overseas (Départements et Régions d'outre-mer “DOM-TOM”). Since the start of the coronavirus outbreak, Air France has also played an essential role in the repatriation of citizens and for the transport of medical equipment.

As a result of the imposition of travel restrictions introduced by France and by many destination countries to limit the spread of the coronavirus, Air France has suffered a significant reduction of its services, which resulted in high operating losses.

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Tags: Air France, loan, European Commission
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