Air France-klm’s aid comes with strings

AIR France-klm’s Dutch arm will get

€3.4bil a (Us$3.8bil) bailout from the Netherlands, bringing the group’s

€10.4bill state-aid total to and tying the struggling carrier to wide-ranging operational and environmental constraints.

€2.4bil KLM will receive of statebacked

€1bil commercial funding and euros in direct government loans, Dutch Finance Minister Wopke Hoekstra said that came after weeks of wrangling over the terms of the funding needed to ride out the coronavirus crisis.

The carrier faces job cuts and environmental curbs on its activities in return for the rescue, and will also end up with greater potential for political meddling after the state appointed an agent to oversee how the money is used.

€7bil The Dutch package follows a bailout of Air France, the carrier’s French arm, and hammers home the reliance of Europe’s biggest airlines on state aid to get through the slump.

It comes a day after Deutsche Lufthansa AG won shareholder

€9bil approval for a German package on top of which Austria, Belgium and Switzerland will also contribute. The rivals are each getting close to Us$12bil in total.

France and the Netherlands each have 14% stakes in Air France-klm, the region’s second-biggest carrier after Lufthansa, and have a history of squabbling over how it should be run. Their separate loans and guarantees will complicate Air FranceKLM chief executive officer Ben Smith’s planned revamp as he navigates the myriad of strings attached to the funding. — Bloomberg