France will contribute up to E4b to strengthen Air France-KLM’s balance sheet, potentially doubling its shareholding as it tries to steer the airline through the worst of the Covid-19 pandemic. The French state, which is already a 14.3% shareholder, will convert E3b in loans it gave to Air France last year into perpetual hybrid debt and take part in a planned additional capital raise for up to E1b. Overall, the government’s shareholding could rise to 29.9%, making it the largest single shareholder, French finance minister Bruno Le Maire told radio station France Inter Tuesday. Benjamin Smith, the airline’s CE, said: “This gives us stability . . . despite all the uncertainty that we have in our industry today.” “We have put together a very extensive, medium to long-term plan, which with the evolution of the union agreements that we have in place, we believe we can have the platform to really make Air France profitable,” he added. This volley of state aid will only benefit the French arm of Air France-KLM, said the EU. The Dutch state, which is also a 14 % shareholder, will not participate in the new capital raise, Air France-KLM said, but “is continuing discussions with the European Commission regarding potential capital-strengthening measures for KLM”. <br/>
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A recapitalisation of Air France-KLM that will see France more than double its stake to nearly 30% will damage competition for decades to come, Europe’s largest low-cost carrier Ryanair said on Tuesday. “This latest tranche of state aid to Air France combined with these ineffective remedies will damage competition in the air transport market for decades to come,” the airline said. “The 18 slots that Air France is being required to make available is nowhere near enough to allow others to offer a competitive challenge to Air France’s dominance at Paris Charles de Gaulle and Paris Orly airports.” <br/>
Russia’s Aeroflot Group is intending to open its new international hub at Krasnoyarsk in June, after the expansion was delayed by over a year by the air transport crisis. Aeroflot’s board has decided that the hub will open on 1 June with a summer schedule including flights to Sochi, Krasnodar, Blagoveshchensk and Simferopol. Krasnoyarsk had previously been selected as a new hub for the group because it was a large city in a central location, about halfway between Moscow and Vladivostok. Aeroflot had intended to carry out first flights in March 2020 and build an initial fleet of eight aircraft for the hub, expanding to 12 aircraft by 2023 – by which time it intended to be transporting around 1 million passengers. The hub is part of an expansion and network-development strategy which includes opening new regional bases across the country.<br/>