Air France To Receive €1.4 billion in COVID Compensation

Photo Credit: Arash Abed/AviationSource

LONDON – On Friday, it was announced by the European Commission that Air France’s state aid of €1.4 billion in COVID compensation has been approved.

The €1.4 billion for the French carrier is for damage suffered between March 17-June 30, 2020, which caused the French carrier to suspend all major services.

This injection means that Air France has collected a total of €12.4 billion in state aid approved by the European Commission.

The Commission’s Comments…


Air France will receive €1.4 billion in COVID compensation from the European Commission.
Photo Credit: Kyle Hayes/AviationSource

In its statement, the European Commission said the following regarding Air France’s compensation:

“The Commission assessed the measure under Article 107(2)(b) TFEU, which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or sectors for the damage directly caused by exceptional occurrences, such as the coronavirus outbreak.”

“The Commission found in particular that the French measure will make good the damage that is directly linked to the coronavirus outbreak.”

“It also found the measure to be proportionate, as the compensation does not exceed what is necessary to make good the damage.”

“On this basis, the Commission concluded that the French damage compensation measure is in line with EU State aid rules.”

“Air France is a major network airline operating in France. It is owned by the Air France-KLM Holding company, in which the French state holds a 28.6% participation.”

“With a fleet of over 300 planes, Air France plays a very important role in the French economy, in terms of employment and connectivity for many French regions, including those overseas (Départements et Régions d’outre-mer “DOM-TOM”).”

“The aid will be granted in several tranches and may take the forms of grants, equity support, or liquidity support.”

Will Ryanair Object to This New Compensation for Air France?


Will Ryanair object to Air France's COVID compensation?
Photo Credit: Kyle Hayes/AviationSource

Not to go off-piste here, but the following question has to be asked: Will Ryanair object to this new compensation for Air France?

The Irish low-cost carrier hasn’t been a stranger to starting legal challenges with the European Commission.

In May 2020, the carrier condemned Lufthansa’s hefty €9bn state aid package, with Ryanair Group CEO Michael O’Leary stating that “Lufthansa is addicted to state aid”.

By February 2021, Ryanair did the same again over the EU courts allowing state aid for Air France and SAS.

There have been many more instances since, but there is a good chance that Ryanair will no doubt raise its concerns again.

AviationSource has approached Ryanair for comment, and at the time of publication, they have not responded.

Overall…


Air France will receive €1.4 billion in COVID compensation from the European Commission.
Photo Credit: Lewis Chesworth/AviationSource

It remains clear that the aftershocks of the COVID-19 pandemic continue to be felt by carriers such as Air France and others.

Looking ahead, it’s going to be interesting to see if any more state aid is approved by the European Commission, especially as there is a major focus on moving away from the pandemic.

But for now, all eyes will be on Ryanair to see how they will respond to the new batch of state aid given to the French carrier.

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