April 6th local time, the European Commission issued a statement saying that it had officially approved the new plan submitted by the French government to rescue Air France. The European Commission said that the French government would help Air France’s holding company Air France-KLM Group to help cope with financial difficulties, but KLM in the group would not benefit from the rescue plan.
Under this plan, the French government’s previous loan of 3 billion euros to Air France will be converted into a hybrid capital instrument composed of debt and equity. In addition, the French government can inject up to 1 billion euros into Air France by purchasing additional shares. As a result, the French government’s share in Air France will rise from 14.3% to nearly 30%, becoming its largest shareholder.
At the same time, the European Commission said that this public relief program would also attach other conditions, especially to prevent unfair competition. To do so, Air France will have to sell a certain share of operations at Orly Airport in the south of Paris, allowing its competitors to increase flight schedules, so as to ensure fair pricing of tickets and increase passengers’ ticket purchase choices.
