Fmr. Finance Minister calls massive financial support for Air France-KLM 'risky'

KLM and Air France planes at the Charles de Gaulle Airport in Paris
KLM and Air France planes at the Charles de Gaulle Airport in Parishzparisien@gmail.comDepositPhotosDeposit Photos

Former Finance Minister Jeroen Dijsselbloem is critical of the Dutch and French governments' plans to provide Air France-KLM with billions of euros in emergency support. It is very risky to extent such major loans to companies that are already in dept, he said to Buitenhof.

To keep the airline combination going, the French government pledged 7 billion euros in support to Air France and the Dutch government promised KLM between 2 and 4 billion euros in aid, in the form of guarantees and loans. Dijsselbloem thinks this is a bad idea. "KLM is suffering losses. These are now being financed with debt. That is extremely risky," he said to the television program.

According to Dijsselbloem, the Dutch government would do better by investing in the company's share capital. And ideally, this would happen together with the French government, to prevent new conflicts, he said.

The result of such a so-called 'bail-in' is that the investors also contribute to the losses, Dijsselbloem said, pointing out that about 70 percent of Air France-KLM is owned by private investors.