The European Commission approved, on Monday 13 July, a €3.4 billion Dutch aid measure consisting of a State guarantee on loans and a subordinated State loan for the KLM airline.
Objective: to provide urgent liquidity to the company in the context of the Covid-19 pandemic. The measures were authorised under the State Aid Temporary Framework adopted by the Commission on 19 March 2020.
Margrethe Vestager, Executive Vice President for Competition Policy, said the Netherlands “imposed certain conditions on the aid measure with respect to profit allocation, working conditions and sustainability”.
France, for its part, has provided €7 billion in aid to Air France.
KLM is a leading airline operating in the Netherlands. It is part of the Air France-KLM group, in which the Dutch State is a shareholder. KLM is the second largest private employer in the Netherlands with more than 36,600 employees.
The Netherlands notified to the Commission an aid measure in favour of KLM to enable the company to mitigate the negative consequences of the coronavirus outbreak.
The measure, with a total budget of €3.4 billion, will take the following forms: - a State guarantee for loans provided by a consortium of banks; - a subordinated loan granted to the company by the Dutch State.
The guarantee premium is in line with the conditions of the Temporary Framework, as it increases over time to encourage early reimbursement. The guarantee will be granted before 31 December of this year and the amount of the guaranteed loan may not exceed €2.4 billion and is below the limits laid down in the Temporary Framework. The maximum duration of the guarantee is six years and will not cover more than 90% of the loan backed by such a guarantee. Safeguards are in place to ensure that the advantage is entirely passed to the beneficiary.
As regards the subordinated loan granted by the State, the maximum duration of the loan is 5.5 years. (Original version in French by Lionel Changeur)