Airline with $12.12bn credit balance makes fervent appeal for stimulus
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Air France-KLM presently with $12.12 billion at its disposal is still fervently pleading to shareholders that the money will barely be enough for one-year operation.
Hence, the Air France-KLM Managing Director/Chief Executive, Benjamin Smith, had put shareholders on notice saying, it is incontrovertible that new capital would need be injected within a year, but the exact amount of additional lifeline to be needed he could not immediately ascertain.
Smith explained that reason for his position on the financials hinged on the very low level of air traffic which he said was picking up very slowly as many northern hemisphere countries were afraid to travel due to the likelihood of a second wave of COVID-19 infections.
He further gave the bases for his notion thus, “If we base it upon the past few weeks, it is clear that the recovery in traffic will be slower than expected.”
It will be recalled that about five months ago, France government made available $8.2billion to the airline while the Dutch government provided $2.9billion stimulus to help shore up the airline’s capacity to make the best out of the current appalling condition of aviation.
However, Air France-KLM helmsman, in an interview with the French daily l’Opinion, said “One, three or five billion euros? It is too early to put a figure on a possible recapitalization.”
Smith said the obvious delay in returning to the era of pre covid-19 traffic volume of 2019, which ostensibly could be delayed till 2024, had been a serious cause for concern.
He further said discussions were already underway with shareholders on shoring up the airline group, and steps would be taken before the next regular annual meeting in the second quarter of next year.
Institutional shareholders in Air France-KLM equity include the French government with a 14.3 percent stake, the Dutch government at 14 percent, as well as Delta and China Eastern airlines with each holding an 8 percent stake. Nigerian government had for over two months now promised to provide the sum of about $58million, circa N27billion, to all the players in the nation’s air transport industry’s eco system. These include Airlines, Ground handlers, Terminal Managers, Air Space Manager, Travel Agencies, among others
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