KLM is to receive a €3.4 billion ($3.8 billion) financial support package backed by the Dutch government to help it recover from the dramatic fall in revenues resulting from the Covid-19 pandemic. The loans were announced on Friday after being agreed by the board of the airline’s Air France-KLM Group parent late on June 25.
The package consists of a €2.4 billion, five-year revolving credit facility from 11 banks with 90 percent guaranteed by the Dutch government. It also includes a €1 billion direct loan from the government repayable by the end of 2026. KLM will draw on these funds on a pro-rata basis over the period of the loans, with the first amount to be used to repay and terminate an initial €665 million credit facility granted on March 19, 2020, at the start of the crisis.
The new package still needs to be approved by the European Commission and also by the Dutch parliament. Conditions attached to the direct state loan, include requirements for the airline to become more environmentally sustainable and also to fully implement a restructuring plan aimed at restoring financial performance and competitiveness.
The package for KLM follows €7 billion in funding for Air France granted by the French government on May 7, 2020. “In the coming period, we will be working on the restoration of the route network and, on the other hand, other development of the restructuring plan and the far-reaching conditions that have been imposed on the package,” commented KLM’s CEO Pieter Elbers.