Air France-KLM

Air France-KLM is a European holding airline. It is headquartered at Charles de Gaulle Airport, near Paris.

The airline is the largest in the world in terms of revenue and the third in the world in terms of the number of passenger kilometers and the size of the passenger fleet.

Aktivs

2022: In operation for May - 526 aircraft

Число planes operation in some airlines as of May 26, 2022. For comparison, Aeroflot's indicator in early 2022 is 243 aircraft

History

2023: Air France-KLM buys 19.9% of SAS

On October 3, 2023, the European holding airline Air France-KLM announced the conclusion of an agreement to acquire 19.9% of the bankrupt Scandinavian air carrier SAS. In the future, Air France-KLM may increase its stake to a control one. Read more here.

2021: Obtaining 4 billion euros from the French state budget

In early April 2021, Air France-KLM will receive 4 billion euros from the state budget as part of the French plan to save the airline. However, this amount may not be enough to withdraw the air carrier from the pandemic crisis, experts say.

Thanks to the assistance provided, the French government will again become the largest investor in Air France-KLM with a share of 30%. The decision was made after several months of negotiations between the shareholders of France and the Netherlands and the European Commission, which finally gave permission for state aid. Negotiations for possible additional financial assistance from the Netherlands are still ongoing, so the project to rescue the airline could be expanded in the future.

French government grants €4bn in financial aid to Air France-KLM

The long-awaited assistance from France came against the backdrop of a new peak in the incidence of COVID-19, which caused the introduction of new self-isolation measures in the country. For Air France-KLM, this is the "first step" in eliminating the unprecedented financial damage caused by the pandemic, Chief Financial Officer Frederic Gagey said on Tuesday. Support for Air France also "must be accompanied by other measures to secure equity," allowing Air France-KLM to return to normal, he said.

The French plan to help the airline aims to reduce the carrier's debts, which soared in 2020 when companies provided a total of €10.4 billion in direct loans and government guarantees. France will convert a 3 billion euro direct loan into hybrid instruments that will bring profits to the company and ensure the redistribution of the stake.

The French state will participate in recapitalization, "while maintaining its stake strictly below 30%," the airline said in a statement. Shareholder China Eastern Airlines will also attend, but keep its stake below 10%. Delta Airlines, the holder of an 8.8% stake, and the Dutch government, which has a 14% stake, have so far refrained from intervening.^[1]

2020:18% staff cut

In early July 2020, Air France-KLM announced the reduction of more than 7,500 jobs due to the crisis in the aviation industry. As a result of layoffs, the carrier's staff will decrease by 18%.

Air France - the second largest European airline - has been unable to cope with the crisis due to extreme forecast uncertainty. The company itself will cut 6,560 people, and regional airline Hop!, which is part of the same group, will lose another 1,020 jobs out of 2,000. The cuts will take place over the next three years.

Air France cuts 18% of state as aviation market collapses

The company said that at the height of the COVID-19 coronavirus pandemic, revenues fell 95%, and Air France lost 15 million euros every day. The airline does not expect flight activity to return to pre-pandemic levels before 2024. Air France is expected to cut more than 6,000 jobs from its total workforce (41,000) by the end of 2022. About half of the cuts should be so-called "natural losses," that is, retirement and dismissal of workers of their own free will.

Air France and Hop! work together with unions on a reduction plan where voluntary redundancies are prioritized, early retirement arrangements are arranged, and the professional and geographical mobility of reduced employees is ensured.

Air France also said a more detailed "reconstruction plan" would be presented at the end of July 2020. Nevertheless, union members and employees of the company have already staged protests at several sites across France, including near the company's offices near the Roissy Charles de Gaulle airport.

The French government has pledged billions of euros to support Air France-KLM and the wider aviation industry. However, this may not be enough.^[2]

Notes