Airline

Air France-KLM eyes early state loan repayment to act on opportunities

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Air France-KLM eyes early state loan repayment to act on opportunities

France’s junior minister for transport, Jean-Baptiste Djebbari, has commented in a piece by The Financial Times that Air France-KLM is coming under growing pressure to repay its pandemic state-aid quickly so it can consider acquisitions. A €4bn recapitalisation by the French state in 2021 constrains the group from taking more than a 10% stake in any competitor until three-quarters of that aid is repaid.

“The issue [for the company] is whether it will manage, financially, to untie its hands quickly enough so that it can respond to market opportunities,” Djebbari said. The group needed to be “one of the major players” in a post-crisis world and in a possible wave of consolidation, he added, allowing it to compete with Lufthansa and other rivals such as International Airlines Group, the owner of British Airways and Iberia.

Lufthansa has made a joint bid with shipping conglomerate MSC for a majority stake in ITA Airways, but Djebbari and other have suggested that Air-France KLM would have also bid for the stake if it had been allowed. The newspaper reports that the airline group has been considering a capital raise to pay off the state aid in order to better capitalise on market opportunities coming out of the pandemic crisis.