The French hotel group Accor has confirmed this week that it has been in discussions to purchase all or part of the French government's 14.3 percent stake in Air France KLM, which at current share value would stand at €420 million (US$491 million).
According to the Telegraaf, the French media had originally leaked the story to test market reaction.
The move appeals to the hotel group as it has a shared customer base and combined digital services plus loyalty incentives would be an additional benefit. Currently Accor has roughly 4,300 hotels in 100 countries, operating under 25 different brands including Raffles, Mercure and Ibis.
The move may remove one of the current obstacles to reform as the French arm of the airline combination has been struggling recently with continual strike action. The carrier has lost over €400 million (US$468 million) as a result of 15 days operations lost through strikes, while many of the workforce are under the mistaken belief that the French government will bail out the carrier if bankruptcy loomed. With the French government relinquishing its stake in Air France KLM, this would pave the way for the carrier to maintain its currently tough stance.
While to some it may seem a strange time to invest in Air France KLM, the problems with Air France have been offset by the success of its Dutch counterpart, KLM which, for the first time, has proven to be more profitable than Air France, posting a €60 million profit for the first quarter compared to Air France's €32 million. However, Air France has posted an operating loss of €178 million for the same period. Further good news for KLM came in the form of the Dutch carrier and its Transavia subsidiary carrying 4.3 million passengers in April, putting it ahead of Air France which carried 3.9 million that month.
It has been reported by Les Echos that the French government has the options of selling its whole stake in Air France KLM to Accor, sell part of it's stake to the hotel group or, according to Reuters, it could do a share swap with Accor and take a stake in the hotel group instead.