Dutch buy Air-France KLM stake to counter French influence

THE HAGUE: The Netherlands announced the surprise purchase of a stake in Air France-KLM, saying it needed to protect Dutch interests after a series of rows about the alliance’s management.

Paris reacted testily to the Dutch purchase of the 12.68 per cent share – which puts it on course to match France’s own holding – saying that Air France-KLM must be free of “state interference”.

The Dutch swoop threatens to reignite tensions after a bitter dispute about the fate of the chief executive of the group’s Dutch arm, and concerns over a series of strikes in France last year.

“With this share purchase, the Dutch cabinet wants to be able to directly influence the future development of Air France-KLM in order to optimally ensure the Dutch public interest,” Dutch Finance Minister Wopke Hoekstra told a hastily arranged press conference in The Hague.

“The aim is to eventually get to a position equal to that of the French state,” which has a 14.3-per cent stake, Hoekstra added.

The Dutch stake cost 680 million euros (US$771 million), Hoekstra said in a letter to parliament.

The government previously had a 5.9 per cent stake in KLM but started buying more shares in the alliance on February 20.

It would cost around a further 70 million euros to reach the French level, broadcaster NOS said.

The move stunned Paris, with Economy Minister Bruno Le Maire saying the Dutch government had not informed the French government.

“It is essential to respect the principles of good governance and for Air France-KLM to be managed ... without state interference,” Le Maire told Les Echos newspaper.

Air France and KLM merged in 2004 but continue to operate largely separately, while the French arm in particular has struggled with industrial action in recent years.

Hoekstra said that “it has become apparent that important decisions about KLM’s strategy were increasingly taken at the level of the Air France-KLM holding company”, with the Dutch government frozen out. — AFP