Air France-KLM Group, joint strategy between France and the Netherlands
State aid guarantees a short survival
France and the Netherlands have a common thought at the moment with regard to air transport, the rescue of Air France-KLM Group. As reported by the managing director, Benjamin Smith, during an interview granted to the “L'Opinion” newspaper, the market demand is very low and the State aid already made available is not sufficient for survival (see AVIONEWS). It is about € 10.4 billion guaranteed by both Paris and Amsterdam; this sum of money may seem important, even if Smith himself pointed out that it is enough to keep the survival for just under a year. Even layoffs weren't enough; the 7,500 fewer jobs were the most appropriate response to crisis and new cuts could be added in 2021.
The pre-covid workforce amounted to 33,000 employees and the reduction is expected to reach 20 percentage points within a few months. Recapitalization is the solution on which the CEO of Air France-KLM intends to focus. Negotiations are underway with shareholders to understand the best ways to strengthen the balance sheet, although the exact amount cannot yet be quantified (more will likely be known within next week).
AVIONEWS - World Aeronautical Press Agency