Air France KLM has repaid €300 million of outstanding French State perpetual bonds, exceeding the 75% COVID-19 recapitalisation aid redemption threshold.
In April 2021, Air France-KLM and the French State agreed to convert the direct French State loan of €3 billion, granted by the French State to Air France-KLM in late May 2020, into perpetual hybrid bonds as a COVID-19 recapitalisation aid to Air France and Air France-KLM approved by the European Commission on April 5, 2021 (subject to several “bans”).
In 2022 the Group repaid €2.4 billion of the €3 billion, leaving €600 million remaining. As announced at the Group’s FY2022 results presentation, Air France-KLM and Air France intend to fully exit the current COVID-19 recapitalisation aid and its related “bans” as from April 19, 2023.
Following the European Commission’s approval on February 16, 2023, of a French State compensation aid granted to Air France without any bans attached, the Group took the first step of repaying and exiting the COVID-19 recapitalisation state aid. This step enables the Group to exceed the 75% redemption threshold of the COVID-19 recapitalisation aid.
Additionally, the Group will refinance €320 million through the issuance of new French State perpetual hybrid bonds as an approved compensation aid to Air France. These new perpetual bonds with no “bans” attached contain similar financial conditions as the one repaid, with non-call date and interest rate step-up postponed by an additional two years (March 2029). (£1.00 = €1.15 at time of publication).