Airline Nationalization Must Be Temporary, French Minister Says

(Bloomberg) --

French Transport Minister Jean-Baptiste Djebbari isn’t shying away from a possible temporary nationalization of airlines hit by the travel slowdown caused by the coronavirus epidemic.

Nationalizing airlines is “a technical option, temporarily, but you need a project, a strategy,” Djebbari said on Europe 1 radio Sunday. “Nationalizing a company, entering the company’s capital, it’s a short-term solution.”

France and the Netherlands each own a 14% stake in Air France-KLM, which has agreed to a government rescue package with loans and state guarantees. But as the pandemic is accelerating in Europe, uncertainty over travel and the future of airlines is increasing, and governments might be asked to step in again.

Smaller airlines, like Corsair in France, are also struggling, and some are wondering if infusions of taxpayers’ money are just prolonging the pain.

“In a world where we don’t travel as much, the question is: what should be the business model of Air France-KLM? What’s its cash need and what should the role of the state be?” Djebbari said.

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