The French state will grant Air France-KLM a total of €7 billion ($7.6 billion) in loans to help it weather the COVID-19 crisis, and longer-term may consider increasing its stake, the Franco-Dutch airline group said April 24.
Air France-KLM’s CEO Ben Smith said he would forego his 2020 bonus and promised to speed up restructuring as the airline group moved closer to securing a multi-billion-euro state-guaranteed loan from France.
Air France-KLM is in advanced negotiations with the French and Dutch governments for state and state-backed loans that would enable the group to face the expected liquidity requirement in the third quarter of this year, according to group executives.
PARIS—Air France-KLM is reportedly hoping to negotiate state-backed loans worth €10 billion ($11 billion) to help it survive the COVID-19 crisis that has cut its activity by around 90%.
Air France-KLM said it had entered “in-depth” discussions with the French and Netherlands governments over the financing the group will need to weather the COVID-19 crisis and is confident the two nations will support it.
Air France-KLM said it would suspend over 90% of planned capacity in April and May because of the global COVID-19 crisis as its own statistics and those of European airports showed massive drops in March passenger traffic.
Air France-KLM is reportedly in talks with the French and Netherlands governments over a state-backed loan of up to €6 billion ($6.48 billion) to help the airline group weather the COVID-19 crisis.
France’s economy minister Bruno Le Maire has pledged to support big companies, including Air France, by any means necessary as the government unveiled an initial €45 billion ($49.6 billion) package of financial aid for struggling businesses hit by the COVID-19 coronavirus crisis.
Ryanair expects “the majority” of its fleet will be grounded while Finnair and SAS are among the latest airlines to stop almost all flights. Air France is also grounding its entire Airbus A380 fleet and KLM its entire Boeing 747 fleet.
Air France-KLM, EasyJet, International Airlines Group and Ryanair all said they will cut most of their flights in the coming days as travel restrictions push demand for air transport close to zero.
Air France and KLM are taking steps to cut back on discretionary costs in a bid to offset the expected impact of the COVID-19 virus on their operations.
SkyTeam members Air France-KLM and Delta Air Lines have announced that their transatlantic joint venture (JV) with UK long-haul carrier Virgin Atlantic will take effect from Feb. 13, bringing together a network of 110 non-stop routes.
While Air France-KLM appears to have held discussions with Malaysia Airlines’ owners, it has rejected speculation that it is bidding to buy a major stake in the Malaysian carrier.
After being denied in its quest to form a joint venture with LATAM Airlines Group and American Airlines – and then seeing rival Delta Air Lines take a stake in LATAM – International Airlines Group is strengthening its position on transatlantic services to South America with the acquisition of Air Europa. Routesonline looks at the current state of play on Europe – Latin America routes.
Air France-KLM and China Eastern's joint venture is to be enlarged to include Virgin Atlantic. As well as the new partnership, it has also been confirmed that regional airline Flybe, which was acquired earlier this year by a consortium that includes Virgin Atlantic, will re-brand as Virgin Connect.
Air France-KLM has ordered 60 Airbus A220 aircraft to replace the A318s and A319s on Air France’s short- and medium-haul network. The group has also confirmed that its remaining A380s will leave the Air France fleet by 2022.
This week: China Eastern’s first A350-900; Lufthansa to reduce capacity growth; Chile court approves LATAM agreements; Air France-KLM CEO; United inaugurates new services and more.
SkyTeam partners Air France-KLM and Air Europa are hoping that a planned joint venture agreement on flights between Europe and Central and South America will help to unlock new routes and direct flights between the two continents.
This week: LEVEL hires first CEO; JetBlue to cut Q4 capacity; BA to resume Pittsburgh; Alitalia excluded from transatlantic JV; and air traffic strikes hit Wizz’s profits.
