French Finance Minister Bruno Le Maire said he would guarantee the survival of Air France after his Dutch counterpart warned more cost cuts may be needed to get through the deep industry slump.
France will “do what is necessary to guarantee the survival of Air France,” Le Maire said on France 2 television. “We’ve already done a lot, and we will continue.” The French and Dutch government ministers were weighing in on plans by Air France-KLM to cut jobs, capacity and planes to respond to the sharp drop in demand caused by the Covid-19 pandemic. The countries, which own a combined 28% stake in the group, came to the rescue earlier this year with $12.3 billion in loans and guarantees to its constituent carriers, Air France and KLM.
Asked whether the airline will get through the crisis, Dutch Finance Minister Wopke Hoekstra said “that is not a given.” Air France-KLM has to adjust its cost base to face the slump and will have to do even more should the pandemic last until the end of next year, he said. The Dutch arm has long been more profitable than Air France, leading to tensions within the group even before the pandemic.
Air France-KLM posted a record quarterly loss in July and is predicting “significantly negative” earnings in the second half. European travel picked up over the past months after governments relaxed lockdown measures, though the pace of recovery has been slowed by renewed outbreaks in several parts of the continent.