The French government is planning to provide Air France with a €7 billion ($7.66 billion) loan intended to soften the economic shock of the coronavirus (COVID-19) pandemic. The loans will be contingent upon the airline cutting some domestic flights and reducing carbon emissions. Advocates of the stipulation argue that it is difficult to justify several domestic routes given the steep decline in the number of travelers. Furthermore, high-speed rail already offers sufficient domestic travel options. The government’s loan program has already been approved by the European Commission which noted the importance of Air France to the French economy and the role it has played in repatriating stranded citizens and transporting medical supplies.
Air France has drastically reduced its activities in the wake of COVID-19. As of early May 2020, the airline is operating at around 5% of its usual scheduled flights. Further indicating the complexity of the situation, Air France merged with Dutch airline KLM back in 2004. The Dutch government is also preparing between €2-4 billion in aid to KLM. Other European airlines like Lufthansa and Alitalia are seeking aid from their respective governments. It has become clear that airlines across the globe will be forced to make substantial changes in the post-pandemic period.
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