Environmental Conditions Attached To Air France Bailout

Air France
The French government has called on Air France to cut domestic flights.
Credit: Nigel Howarth/Aviation Week

France’s economy minister has told Air France to drastically reduce its emissions in return for the €7 billion ($7.6 billion) in loans the French state has promised the Air France-KLM group to help it survive the COVID-19 crisis. 

“This support to Air France is not a blank check,” France’s economy minister Bruno Le Maire said in a video posted on Twitter April 30. His words echoed those of Air France-KLM CEO Ben Smith on April 24 after the French state granted the funding. 

“We have held long negotiations and we have fixed conditions, with the first condition one of competitiveness,” Le Maire said. “Air France must make efforts to become more profitable and more competitive.”

The airline must also meet new sustainability targets, Le Maire said, responding to calls in many European countries that state bailouts for airlines be conditional on new environmental targets being agreed upon. 

France wants Air France to cut its CO2 emissions per passenger kilometer 50% by 2030 compared with 2005 levels, Le Maire said. 

“We want Air France to reduce the volume of its CO2 emissions from flights within metropolitan France by 50% by the end of 2024,” Le Maire said, describing the target as a “new and drastic condition” which should lead to a re-evaluation of transport options within France.

“Where there are rail alternatives to an internal flight of under two and a half hours, these internal flights should be cut drastically and in fact limited to transfers to a hub,” Le Maire said. 

“A flight should no longer be a way to make a journey in an hour or an hour and a quarter that could be made with a lower emissions cost by train in two or two and a half hours. This should be the rule and we will make sure it is respected,” Le Maire added. 

The French government wants Air France to become the world’s most environmentally respectful airline, Le Maire said, adding that this had been an essential condition of signing the state loan agreement. 

As the aviation industry has been brought to its knees by the COVID-19 crisis, environmental campaigners have stepped up calls for sustainability conditions to be imposed on airlines requesting aid.

Andrew Murphy, aviation manager at lobby group Transport & Environment, said: “France’s green requests are a first but we had non-binding commitments for years and airline pollution ballooned. Governments should require the industry to take up greener fuels and pay taxes like the rest of us.”

The Netherlands has also pledged to support KLM with €2-4 billion in funding. The Dutch government has said KLM will not be able pay dividends or award bonuses for the duration of the financial assistance and its staff will have to take pay cuts, with the highest earners making the largest contribution. KLM will also have to make a contribution in terms of sustainability and nuisance reduction, such as cutting back the number of night flights.

France owns 14.3% of the Air France-KLM Group and the Netherlands own 14%.

Helen Massy-Beresford

Based in Paris, Helen Massy-Beresford covers European and Middle Eastern airlines, the European Commission’s air transport policy and the air cargo industry for Aviation Week & Space Technology and Aviation Daily.