Air France-KLM in Talks for French State Cash Injection

(Bloomberg) --

Air France-KLM has asked the French state for an immediate cash injection to help the troubled carrier stay afloat in the next four to five months, according to Les Echos newspaper.

The cash injection, which could represent “many billions” of euros, would come on top of state-backed loans worth about 6 billion euros ($6.5 billion) the company is currently negotiating with lenders, Les Echos said, without saying where it got the information.

Air France-KLM officials declined to comment on the report.

On Friday, French Finance Minister Bruno Le Maire vowed to provide strong backing for Air France-KLM after the airline warned that without additional financing, it would need to raise liquidity in the three months through September, despite drastic cost-cutting measures that include slashing planned investments and accelerating the retirement portions of its fleet.

The airline industry has been hit by the global spread of Covid-19 as the epicenter moved from China at the start of the year to Europe and then took hold in the Americas. Air France-KLM still expects flight activity in the next few months to be at about 10% of last year’s levels.

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