Some of Europe’s biggest airlines are lining up for government aid and loan guarantees to tide them over the Covid crisis, and the first case—Air France—has been approved by the European Union’s Competition Commission.
EU approval is necessary for any exception to the EU’s rules against government’s weighting the scale for favored companies over competitors without government aid. France plans to put up €7 billion in loans and other supports.
In its official statement, the Commission “concluded that the measure will contribute to managing the economic impact of the coronavirus in France. It is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the Temporary Framework.”
Long story short, that leaves the door open for other governments to act. Italy has already taken state control of bankrupt Alitalia; Lufthansa and Lufthansa-owned Austrian Airlines are negotiating with governments for loans and aid, but are being told they must first make some concessions. Air France is jointly owned with Dutch airline KLM; it is not clear if the Netherlands intends to follow a similar course.
