Air France-KLM shares tank following €4bn repayment promise
Shares of aviation colossus Air France-KLM have tanked 7.94 per cent after the group said today it would repay €4bn of pandemic state aid.
The announcement overshadowed the positive results obtained in the fourth quarter because of the easing of restrictions, including a 3.7 per cent increase in the company’s core profit and a €4.8bn revenue.
Air France-KLM’s decision was confirmed by the French and Dutch governments, from whom the airline had borrowed in 2020 €10.4bn to weather Covid. Both Paris and the Hague announced the repayment was decided in October, following the third quarter results.
“Air France-KLM intends to remain flexible on the transaction structures, as well as on the sequencing and the sizing of each instrument depending on market conditions,” the carrier said in a statement, providing no further details about terms and timing.
To satisfy the conditions of the French Government’s bailout, Air France in April 2020 agreed to become the world’s “most environmentally friendly” airline.
Improving the fleet’s carbon efficiency by 50 per cent by 2030, as well as committing to a 2 per cent minimum sustainable fuel mandate featured among the conditions.
The carrier initially promised to reduce by 50 per cent CO2 emissions from domestic flights but in April 2021, the Elysee imposed a ban on domestic flights when a 2.5h train could be used as replacement.