France Pushes Back On EU’s Air France Demands

French Transport Minister Jean-Baptiste Djebbari pushed back against the idea that indebted Air France should give up slots at Paris-Orly airport to win European Commission approval for more State aid.

Any concessions should be tied to broader reforms to eliminate advantages that allow low-cost carriers to “distort the market,” Djebbari, a licensed pilot, said in an interview with Bloomberg Television on Thursday, February 11.

European Union regulators are asking Air France-KLM to yield slots at Paris Orly airport in exchange for a recapitalization of the struggling carrier. But President Emmanuel Macron’s government argues that abandoning some takeoff and landing rights at the hub closest to Paris would be a major competitive setback for the airline, which it considers a strategic asset.

On Wednesday, Margrethe Vestager, the EU’s antitrust chief, warned that Deutsche Lufthansa AG’s concessions in yielding slots at two airports in return for a German government stake now serve as a precedent for other cases. Under pressure from EU governments, Vestager has already relaxed rules to allow unprecedented subsidies to help companies through the pandemic.

In the interview, Djebbari suggested Lufthansa’s slot reductions shouldn’t serve as a model, saying “we want something proportionate that addresses not only competition but the social reality of the sector.”

He declined to put a number on the recapitalization of Air France, which like other airlines has been battered during the pandemic, saying only, “we are talking about billions.” Full recovery in the aviation sector is only expected within “the two or three next years,” the minister added.

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