French state to inject up to E4b into Air France-KLM

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/>