EU Executive Clears Way for €4B Air France State Support

The European Commission on Tuesday gave the green light for Air France to receive 4 billion euros (4.7 billion dollars) in financial support by the state.

The money is intended to be used for recapitalization measures. A 3-billion-euro loan has already been granted by France and was approved by the commission last May. That sum will now be turned into a hybrid capital instrument.

The company will also receive money through the creation of new shares that the French state can buy, not exceeding an investment of 1 billion euros. They will also be available to private investors.

The commission's Vice President Margrethe Vestager said: " France will contribute up to 4 billion euros to reinforce Air France's equity and help the airline face financial difficulties resulting from the coronavirus outbreak."

However, to access the grants, Air France will have to fulfil certain conditions to prevent the measures from distorting competition. The conditions include making 18 slots per day available to a competing airline at Paris Orly airport.

"This gives competing carriers the chance to expand their activities at this airport, ensuring fair prices and increased choice for European consumers," Vestager said in a press release.

Following the announcement on Tuesday morning, the company share price rose by about 6 per cent.

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