Air France-KLM Group and Air France Secure Funding of €7 Billion to Help Overcome The Crisis and Prepare for the Future

April 29, 2020

Willkie’s Paris office represents Air France-KLM Group and Air France on securing funding of €7 billion to help overcome the COVID-19 crisis.

On April 24, the Air France-KLM Group announced that, following several weeks of discussions with the French state and banking institutions, Air France-KLM Group and Air France were able to finalize the various components of a support mechanism dedicated to Air France on which principle agreements are being finalized:

This support mechanism includes:

  • A French state-backed loan of €4 billion granted by a syndicate of eight banks to Air France-KLM and Air France. The French state is guaranteeing this loan up to 90%, and it has a maturity of 12 months, with two consecutive one-year extension options exercisable by Air France-KLM;
  • A direct shareholder’s loan of €3 billion from the French state to Air France-KLM with a maturity of four years, with two consecutive one-year extension options exercisable by Air France-KLM.

This aid mechanism, which remains subject to approval by the European Commission, will enable the Air France-KLM Group to provide Air France with the means necessary to meet its obligations by continuing its transformation in order to adapt in a sector that the global crisis due to the COVID-19 will severely disrupt.

A global giant with a strong European base, the Air France-KLM Group’s main areas of business are passenger transport, cargo transport and aeronautical maintenance. The group achieved a turnover of €27.2 billion in 2019 and employs 83,000 people. Air France-KLM is the leading Group in terms of international traffic on departure from Europe. It offers its customers access to a network covering 312 destinations in 116 countries thanks to Air France, KLM Royal Dutch Airlines and Transavia. With a fleet of 550 aircraft and 101.4 million passengers carried in 2018, Air France-KLM operates up to 2,300 daily flights.

The Willkie deal team was led by partner Lionel Spizzichino and included partners Gabriel Flandin (corporate), Thierry Laloum (public law), Paul Lombard (finance), and Faustine Viala (antitrust & competition).