Dutch Airline KLM to Get 3.4 Billion Euro Bailout Package
The Dutch government said on Friday it would provide 3.4 billion euros ($3.8 billion) in support to the Dutch arm of Air France-KLM, capping months of wrangling with France over the role each country should play in a coronavirus rescue deal.
The move comes after Paris announced a 7 billion euro bailout package for Air France in April and as governments look to shore up an industry hammered by a travel slump expected to last for years.
As part of the package, the Dutch government will appoint an observer to KLM’s board to ensure taxpayer money is spent only on the Dutch subsidiary, but won’t have control of the business.
It will also force painful reforms, including pay and spending cuts, a freeze on bonuses and dividends, as well as ambitious environmental targets that were sought by the Dutch parliament as a condition for aid.
“This package is needed to make sure that KLM and Air France can continue to fulfil the important role that they have in our economy,” Finance Minister Wopke Hoekstra told a news conference.
Reuters first reported details of the aid package on Thursday. Sources said The Hague had sought a seat on KLM’s board, but was rebuffed by Paris. The countries’ leaders met over the matter this month.
The French and Dutch governments have frequently been at odds over management and strategy at Air France-KLM, created by the 2004 merger between the two national airlines. Each holds a 14% stake in the group.
At 0832 GMT, Air France-KLM shares were up 1.8%.
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