The capital increase of almost 1 billion euros for Air France KLM is coming, and it will be largely supported by the French state, which through thislast aid operation from 4 billion in total (3 billion by transforming a bond into shares and 1 billion in new shares issued) rises to 30% of the airline. To be precise, the part of the increase intended for the market through the issue of new shares amounts to 988 million, which Paris will cover for two-thirds, effectively doubling its stake in the Franco-Dutch group. However, there is also a substantial interest in the story on the part of the Chinese China Eastern Airlines: the Asian airline will in fact invest up to 168 million euros to slightly increase its share, which is currently 8,8% and will still remain below the agreed limit of 10%.
The share issue, which could rise to 1,14 billion euros with an increase option, has already received the green light from Brussels: the European Commission, in particular the Vice-President Margrethe Vestager, has closely monitored the matter, given the contemporary crises of Alitalia and Lufthansa. The French and German companies were granted real state aid, since - unlike our national airline - they were not in trouble even before the Covid. However, public intervention in Air France is subject to strict limits: Air France-KLM will not be able to pay dividends, non-mandatory coupon payments, share purchases and management bonus payments until the recapitalization is completed and public capital has been repaid. In addition, the company will have to sell 18 slots a day at Paris Orly airport, which is somewhat of its "fief", to a rival carrier.
However, Economy Minister Bruno Le Maire has managed not to give these spaces to low-cost airlines. Air France-KLM closed 2020 with losses of 7 billion and two weeks ago announced that it expects an operating loss of 1,3 billion euros in the first quarter of 2021, even if the outlook for the full year 2021 looks positive : The company says it has solid liquidity and expects “a significant recovery in demand in 2021”.
