Capital hike brings Air France under government's wing

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PARIS: France will contribute up to €4 billion (US$4.7 billion) to a recapitalisation of Air France-KLM and more than double its stake in the ...

PARIS: France will contribute up to €4 billion to a recapitalisation of Air France-KLM and more than double its stake in the airline group to almost 30 per cent, under plans announced on Tuesday with European Union approval.

The agreed conditions require France to find a"credible exit strategy" within a year and cut its shareholding to pre-crisis levels by 2027. Dividends, share buybacks and management bonuses are banned until most or all of the aid is repaid. The restrictions on slot reallocation were"one of the sticking points" in drawn-out talks with Brussels, Le Maire said."We do not want any social dumping."The bailout is the closest a major European carrier has come to renationalisation, after Germany took a 16.7 per cent holding in Lufthansa as part of its rescue package.

 

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