French state doubles stake in Air France-KLM in rights issue

PARIS: Loss-making Air France-KLM said Monday it had raised just over a billion euros ($1.25 billion) in a share issue that saw the French state double its stake in the company to 28.6 percent. "The success of our capital increase and the renewed support of our main shareholders testify to the confidence of investors in the prospects of the group," Air France-KLM CEO Benjamin Smith said in a statement.

The group lost 7.1 billion euros in 2020 due to the effects of the coronavirus pandemic which has resulted in the collapse of the global travel industry.

Not all of Air France-KLM's main shareholders took part in the share issue, with the Dutch state declining to invest further and US airline Delta barred from buying shares under American state aid rules.

Chinese airline China Eastern increased its stake to 9.6 percent from 8.8 percent. The French state led uptake of the new shares after being authorised to double its stake on April 6 by the European Union, which vets state aid in the 27-member EU bloc.

Total French state assistance to Air France-KLM is set to total $4.7 billion and includes converting emergency state loans into company funds.

The airline said earlier Monday that it hoped to be running at 50 percent capacity this northern hemisphere summer and perhaps more if travel picks up further.

"There's limited visibility for us, we are encouraged with the acceleration of the (coronavirus) vaccine rollout in Europe," Smith told the online World Aviation Festival.