European Commission approves €3.4bn KLM bailout
The European Commission has approved a €3.4bn (£3.1bn) bailout of the Dutch wing of Air France-KLM, despite objections from Ryanair boss Michael O’Leary.
The rescue package, which was agreed last month, will see the Dutch government guarantee a €2.4bn loan from a consortium of banks, as well as providing €1bn in loans itself.
When the deal was first announced, O’Leary called on the EU to block it, describing the bailout as “subsidy doping”.
He said that it would reduce competition and consumer choice in the French and Dutch air markets.
In a statement, the Commission said that the rescue package was “essential” for the airline to “obtain vital liquidity” during the ongoing coronavirus crisis.
It warned that as restrictions on air travel were slowly lifted KLM would not be able to finance the ramp-up of its activities without the loan.
KLM is the Netherlands’ second-largest private employer with over 36,600 employees.
The deal is the third major airline bailout the EU has approved during the coronavirus crisis, with German giant Lufthansa having already received €9bn in taxpayer money.
Air France, KLM’s partner, was also gifted €7bn from authorities, who warned that if they did not provide the emergency funding it could cause “severe harm to the French economy”.
It is understood that Dutch ministers have imposed their own addition conditions on KLM in return for the money, just as their French counterparts did with Air France.
Margrethe Vestager, the Commission’s vice president for competition policy, said the deal would provide KLM with enough liquidity to withstand the crisis.
“The Netherlands imposed certain conditions on the aid measure with respect to profit allocation, working conditions and sustainability”, she said.
“Member states are free to design measures in line with their policy objectives and EU rules.”
O’Leary has been a consistent opponent of state aid for airlines throughout the crisis, having already slammed the Lufthansa deal as “unlawful”.