State Aid Case SA.57116 | COVID-19: State loan guarantee and State loan for KLM

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Author (Corporate)
Publication Date 2020
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Summary:

Assessment conducted by the European Commission on proposed measures proposed by the Netherlands aimed at supporting and recapitalising air carrier KLM, in the framework of the Temporary Framework for State Aid put in place in light of the COVID-19 (coronavirus) pandemic.

Further information:

KLM is a major network airline operating in the Netherlands. It is part of the Air France-KLM group, in which the Dutch state holds a participation. It is also the country's second-largest private employer. Due to the pandemic, the air carrier suffered a significant reduction of its services, which resulted in high operating losses. As air passenger traffic slowly starts recovering, KLM does not have sufficient liquidity in order to finance the ramp up of its activities.

In April 2020 the Dutch government showed intention to support the air carrier, adding to the support provided by the French Government to Air France. As a response to the urgent liquidity needs, the national authorities later presented a 3.4 billion aid measure on loans and a subordinated State loan to KLM. Following notification to the European Commission, the plans were approved on 13 July 2020 in the framework of the Temporary Framework for State Aid.

Related Link(s)
News
Euronews, 07/05/2020: Ryanair's O'Leary slams 'state aid junkies Lufthansa and Air France' https://www.euronews.com/2020/05/05/ryanair-ceo-michael-o-leary-says-eu-transport-chief-talking-nonsense-on-state-aid
City AM, 26/06/2020: Ryanair boss Michael O'Leary calls on EU to block KLM bailout https://www.cityam.com/ryanair-boss-michael-oleary-calls-on-eu-to-block-klm-bailout/
Bloomberg, 26/06/2020: Air France-KLM’s $3.8 Billion Dutch Aid Comes With Strings https://www.bloomberg.com/news/articles/2020-06-26/air-france-klm-to-get-3-8-billion-in-aid-from-the-netherlands
RTÉ News, 26/06/2020: Dutch government backs €3.4 billion KLM support deal https://www.rte.ie/news/business/2020/0626/1149756-klm-support-package-agreed/

Official
European Commission: DG Competition: State Aid Register: Case SA.57116 https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_57116
Dutch Government: Letter to the House of Representatives on possible support measures for Air France-KLM (24 April 2020) https://www.government.nl/documents/parliamentary-documents/2020/04/24/letter-on-possible-support-measures-for-air-france-klm
KLM Group: News, 24/04/2020: KLM grateful for €2-€4 billion in state aid pledged by Dutch government https://news.klm.com/klm-grateful-for-2-4-billion-in-state-aid-pledged-by-dutch-government/
European Commission: Press Release, 13/07/2020: State aid: Commission approves Dutch plans to provide €3.4 billion in urgent liquidity support to KLM https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1333

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