What will Air France do with the 7 billion euros in aid promised by the Minister of the Economy Bruno Le Maire Friday, April 24, in the form of 4 billion bank loans guaranteed by the State at 90% to which are added 3 billion direct loan?
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Air France-KLM chief executive, Canadian Benjamin Smith, outlined an upcoming recovery plan in two interviews with Echoes and at Sunday newspaperannouncing want “Accelerate” the transformation of the company with “Social impact as small as possible”.
A fleet nailed to the ground
The emergency aid provided by the government will first cover the dry loss of revenue caused by the coronavirus crisis and the containment measures taken to limit the spread of the epidemic. For more than a month, almost the entire fleet has been grounded, only 3 to 5% of regular flights are currently provided, and this situation could only improve very gradually, for at least three reasons .
Firstly, because traffic restrictions on a global level will last, in particular on destinations like the United States, China or Africa. Secondly, because it will be difficult to relaunch the planes in good safety conditions. Not to mention the confidence of travelers, which risks being permanently damaged.
An accelerated transformation plan
Given all these uncertainties and difficulties, the boss of Air France-KLM estimates that it will take at least two years before returning to normal activity, thanking the French State for these 7 billion loans that will allow “To pass this crisis, the most serious in the history of the air”. He also ensures that the implementation of the transformation plan launched last November will be “Accelerated in at least two areas: the rationalization of the home network, which generated 200 million losses last year, and the restructuring of operational support functions”.
In terms of employment, this could translate into a voluntary departure plan which remains to be specified. During his presentation of the qualified help plan“Historic” for “Save Air France”, Minister Bruno Le Maire had insisted that the measures had been taken “To save the 350,000 direct and indirect jobs that go with it.”
Hop! in the crosshairs
“The government has made no specific request, but it has clearly underlined that this financial effort is made above all to support Air France employees. We will make sure that the social impact is as small as possible “, said Benjamin Smith.
The regional airline Air-France – Hop! is clearly in the crosshairs of this announced restructuring. “With operational costs higher than the average of European regional companies, this situation is not viable”, he estimated. However, clarifying that the objective was not to “Make it disappear” the subsidiary.
The help given to Air France could cause another controversy over “Ecological conditions” posed by the government, or rather the absence of formal requirements. “Air France must become the most environmentally friendly airline on the planet”, however emphasized Bruno Le Maire.
Intentions and actions
But already some, like MEPs Yannick Jadot (EELV) or his counterpart Pascal Canfin (LREM) who chairs the environment committee in the European Parliament, are demanding action. “The intentions are there and I have no reason to doubt them. But the concrete methods which formalize them remain to be negotiated ”, said the latter, guest of the radio program “Political Issues”, Sunday, April 25.
The European Commission is due to examine state aid to governments this week. And to say whether or not it validates the support plan granted by France, but also the Netherlands, to the company Air France-KLM.