The French government has reached a deal with the European Commission allowing it to inject fresh money into flagship airline Air France, it said on Sunday, as the airline’s finances creak under the effects of COVID-19 restrictions
The agreement follows weeks of negotiations with the EU’s executive, which must ensure that state aid does not give companies an unfair advantage.
“We have an outline agreement with European Commissioner Margrethe Vestager about new financial aid for Air France,” French Minister of Finance Bruno Le Maire said on the RTL political broadcast Le Grand Jury.
Photo: Reuters
Air France, of which the French government owns 14.3 percent, will have to give up “a certain number” of slots at Orly, Paris’ second-largest airport after the Charles de Gaulle airport, in return for the green light from Brussels, Le Maire said.
Air France posted a 7.1 billion euro (US$8.34 billion) loss last year as its business, like those of the rest of the world’s airlines, was affected by restrictions which all but grounded global air traffic.
Le Maire would not be drawn on the amount of new funds to be given Air France, saying this was part of discussions to be held with the airline, whose board needs to vote on the deal and was to meet today.
The agreement with the Commission was “very good news for Air France and for the whole French aviation sector,” Le Maire said, adding that negotiations had been “tough.”
The minister declined to say how many slots at Orly Air France would have to give up, but said it would be fewer than the 24 that the commission had initially asked for.
The French government has already given “a lot of help” to Air France to weather the COVID-19 crisis with an initial sum of 7 billion euros and would “not sign a blank check” this time around, Le Maire said.
“There are tens of thousands of jobs involved. Air France is strategic for our country,” he said.
The carrier must become more competitive and continue to reduce carbon emissions, he said.
“The taxpayer is making an effort, and Air France must also make an effort,” Le Maire added.
A European Commission spokesperson said that the executive was in contact with the French government but could not “predict the timing or outcome of these contacts.”
According to EU rules, any government granting more than 250 million euros in aid to a company with “significant market power” had to propose additional measures to safeguard competition, the spokesperson said.
Any fresh capital for Air France would be scrutinized not only by the EU, but also by the carrier’s competitors, which want to make sure that the playing field remains level.
The Air France plan comes as France faces rising deficits and debt because of a weaker economic rebound than hoped.
The annual deficit, which has spiraled as French President Emmanuel Macron’s government tries to prop up the struggling economy with massive spending, is expected to reach 9 percent of GDP this year, Le Maire said.
This compares with an 8.5 percent estimate included in the government’s budget plan for this year, and a three percent deficit limit that EU members must usually respect, but have swept aside as they deal with COVID-19.
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
Taiwan will prioritize the development of silicon photonics by taking advantage of its strength in the semiconductor industry to build another shield to protect the local economy, National Development Council (NDC) Minister Paul Liu (劉鏡清) said yesterday. Speaking at a meeting of the legislature’s Economics Committee, Liu said Taiwan already has the artificial intelligence (AI) industry as a shield, after the semiconductor industry, to safeguard the country, and is looking at new unique fields to build more economic shields. While Taiwan will further strengthen its existing shields, over the longer term, the country is determined to focus on such potential segments as
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
RSS