Air France-KLM: the Dutch do not rule out a recapitalization

Dutch Finance Minister Wopke Hoekstra said on Wednesday he was ready to discuss a possible recapitalization of Air France-KLM if the aid provided to the airline alliance by the French and Dutch states is not enough to keep it afloat.

The CEO of Air France-KLM, Benjamin Smith, had indicated on Monday that the several billion euros of aid provided to the group will allow it “to last less than 12 months”.

“We have always said, also in the Dutch parliament, that the first phase concerned loans,” reacted Wopke Hoekstra on Wednesday.

“But it is also possible that a real injection of capital, and not loans, is necessary to ensure the existence and survival of the company,” the minister told Dutch public television NOS.

France and the Netherlands respectively own 14.3% and 14% of the Franco-Dutch group that the airline company Air France forms with KLM.

Paris granted seven billion euros in aid to Air France in the spring of loans to deal with the consequences of the new coronavirus crisis.

The Netherlands did the same for KLM with a loan of 2.4 billion granted by 11 banks, 90% guaranteed by the Dutch state, as well as a direct loan from the latter to the tune of one billion. euros.

Hoekstra warned, however, that any recapitalization would have to come with conditions, and those will need to be discussed in the weeks and months to come, if so.

On Monday, Mr. Smith said that discussions were already underway with shareholders on how to strengthen the group’s balance sheet, adding that the question of a possible recapitalization would be “decided before the next general meeting” which is usually held in during the second trimester.