Air France to Receive €1.4 Billion to Recover from COVID-19 Losses

As an aid to Air France's hardships resulting from the COVID-19 pandemic, the European Commission approved a EUR1.4 billion funding fund.

SchengenVisaInfo.com reports that the EU Commission released a press release stating that the aid was intended to compensate the airline for the damages it sustained between March 17th and June 30, 2020 due to travel restrictions imposed on the sector.

After EUR7 billion had been allocated to liquidity support for Air France (authorized by the EU Commission on May 4, 2020), this new decision follows. Another EUR4 billion was also designated for recapitalization of the airline. This was approved by the Commission on April 6, 2020. Aid will be available in multiple tranches, including cash support, equity support and grants.

"The Commission has examined the measure under Article 107(2)(b ) TFEU, which allows it to authorize State aid granted by Member States to compensate certain companies or sectors for damage caused directly by extraordinary events, such as the coronavirus pandemic. On this basis, the Commission concluded that the French compensation measure was in line with EU state aid rules," the press release explains.

Nearly 1,580 Air France workers who lost their jobs because of the Coronavirus pandemic will be receiving EUR17.7million in aid. These workers will receive support such as career guidance, job search assistance and advisory. They also get customised vocational training to improve their skills. Participants will also be provided with tips and grants up to EUR15,000.

These measures can be costly up to EUR21 millions, including the EGF, which is a special EU instrument of EU solidarity to aid European workers and self-employers who were displaced to seek new jobs.

The EGF has a budget in excess of EUR210 millions for the next four-years and can finance anywhere from 60 to 85 percent of costs associated with projects that help workers find new work.

Air France KLM Group data shows that the second quarter 2022 showed positive indicators. Net income was EUR386million and revenue reached EUR324million, a EUR1.8 billion more than the previous year.

Comparing data from the second quarter 2021, Air France had 22,803 passengers. This represents a 224.5 percent increase in passengers and a 243.4% rise in traffic to total 61,365.

The revenue increased by 138.7 percent, reaching EUR6,707 in the second quarter. In contrast, the total increase for the entire 2022 period was 123.8%.

Source: schengenvisainfo.com