The European Commission has approved, under EU State aid rules, a €3.4 billion Dutch aid measure consisting of a state guarantee on loans and a subordinated state loan to KLM to provide urgent liquidity to the company in the context of the coronavirus outbreak. The measures were approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “KLM plays a key role for the Dutch economy in terms of employment and air connectivity. The crisis has hit the aviation sector particularly hard. This €3.4 billion State guarantee and State loan will provide KLM with the liquidity that it urgently needs to withstand the impact of the coronavirus outbreak. The Netherlands imposed certain conditions on the aid measure with respect to profit allocation, working conditions and sustainability. Very good. Member States are free to design measures in line with their policy objectives and EU rules.”
In its decision notice, the European Commission found that this measure is in line with the Temporary Framework, in that it: (i) increasing over time to encourage early reimbursement, (ii) the loan will be granted before 31 December this year, (iii) the amount of the loan is below the limits of the Temporary Framework, (iv) the maximum duration of the loan is 5.5 years, and (v) KLM was not in difficulty on or before 31 December 2019.