KEY POINTS

  • Passenger levels are down some 70% from last year
  • Loan packages would aim to prevent nationalization
  • French and Dutch governments are minority shareholders in Air France-KLM

Air France-KLM may be looking to secure more than $7 billion from governmental minority stakeholders France and the Netherlands amid a downturn in revenue.

French newspaper Le Monde reported Tuesday that the French government could provide $3.6 billion and the Dutch government could supply another $1.2 billion toward the bailout. The airline group itself is looking for another $2.4 billion “in hybrid loans on the markets,” the report said.

The French and Dutch governments each own about 14% of Air France-KLM. The cash-strapped airliner received an $8.3 billion loan from the French government in April. According to the Reuters news agency, French Finance Minister Bruno Le Maire suggested in recent days that more financial assistance could be coming for the airline.

But according to British daily The Telegraph, the French transportation minister was questioning how Air France-KLM was structured and how it was backed by the two governments.

The airline group in early November said it was in the midst of its “worst crisis in its 101-year history,” with the pandemic “eroding” its finances. A $4 billion loan package from the Dutch government already in hand is essential to its future.

Like many others in the industry, Air France-KLM is struggling because of limited travel options during the pandemic. In its third-quarter earnings report, the company found passenger levels were nearly 70% lower than they were during the same period last year.

“We expect a challenging fourth quarter 2020, with current forward booking sharply down compared to last year,” CEO Benjamin Smith said in a statement.

Any additional loan package would secure a shareholder balance that would prevent the nationalization of the airline. The group is the results of a 2004 merger between Air France and Dutch carrier KLM.

KLM chief executive Pieter Elbers admitted that the coronavirus pandemic meant the airline was "asking a lot from all colleagues KLM chief executive Pieter Elbers admitted that the coronavirus pandemic meant the airline was "asking a lot from all colleagues" Photo: ANP / Koen van Weel