Dutch say Air France-KLM cash boost might be needed

Dutch Finance Minister Wopke Hoekstra said today the government was willing to discuss another cash injection for Air France-KLM should a multi-billion bailout fail to keep the troubled airline flying.

Hoekstra’s comments come as airline chief executive Benjamin Smith said this week that multi-billion-euro packages for the French and Dutch national carriers would keep it in the air for less than a year.

“We’ve always said, also to the Dutch parliament, that the first phase is about loans,” said Hoekstra.

“But the possibility also exists that a real capital injection, not loans, may be needed to ensure the company’s existence and survival,” Hoekstra told the NOS public broadcaster.

Airlines faced steep drops in revenue as countries imposed lockdowns earlier this year to stem the spread of the coronavirus pandemic. Several airlines have already gone under.

A number of countries stepped in with support, including France which provided €7.0 billion (US$8.2 billion) to Air France and the Dutch government which provided a €1.0 billion loan and 11 banks a further €2.4 billion to KLM.

The top Dutch finance official however cautioned that any cash injection would come with conditions and “if, and under what conditions will be discussed within the coming weeks and months.”

Smith on Monday said discussions were already underway with shareholders on shoring up the airline group, and steps would be taken before the next regular annual meeting in the second quarter of next year.

The airline group had €14.2 billion in cash or available under credit lines.

Major shareholders include the French government with a 14.3 percent stake, the Dutch government at 14 percent, and Delta and China Eastern airlines which each hold an 8.0 percent stake.