In a bid to counter French influence over the Dutch arm of Air France-KLM, the Dutch government has acquired a 12.7 percent stake. With the move highlighting the rising tension between the two countries, shares in Air-France KLM had fallen by 11.3 percent at 1612 GMT according to Reuters. Late on Tuesday, Dutch Finance Minister Wopke Hoekstra announced the initial 12.7 percent stake acquisition for 680 million euros ($774 million) and pledged to increase the holding to parity with France’s 14.3 percent stake.
Problems have simmered for some time as the Dutch influence on the carrier has waned under a French-dominated executive board. Despite the merger of Air France with Dutch airline KLM in 2004, the KLM subsidiary has maintained an independent corporate structure. However, since taking the helm of Air France-KLM, Canadian Chief Executive Ben Smith has looked for deeper integration, but has met with the might of The Hague’s backing of KLM’s desire to have a greater say in the subsidiary’s activities.
Air France-KLM said on Wednesday it would seek to ensure that the Dutch government’s sudden arrival as a major shareholder “will not negatively impact the new working dynamic of the group”.
Delta Airlines and China Eastern Airlines have each also hold an 8.8 percent stake in Air France-KLM, while analysts Liberium have stated that “Government interference is unwelcome and likely to be contrary to investors’ interests,”
At a news conference called at short notice on Tuesday night in the Hague, Hoekstra said buying the stake was a “fundamental step toward protecting Dutch interests”.
