The French government has reached a deal with the European Commission allowing it to inject fresh money into flagship airline Air France, it said on Sunday, as the airline’s finances creak under the effects of COVID-19 restrictions
The agreement follows weeks of negotiations with the EU’s executive, which must ensure that state aid does not give companies an unfair advantage.
“We have an outline agreement with European Commissioner Margrethe Vestager about new financial aid for Air France,” French Minister of Finance Bruno Le Maire said on the RTL political broadcast Le Grand Jury.
Air France, of which the French government owns 14.3 percent, will have to give up “a certain number” of slots at Orly, Paris’ second-largest airport after the Charles de Gaulle airport, in return for the green light from Brussels, Le Maire said.
Air France posted a 7.1 billion euro (US$8.34 billion) loss last year as its business, like those of the rest of the world’s airlines, was affected by restrictions which all but grounded global air traffic.
Le Maire would not be drawn on the amount of new funds to be given Air France, saying this was part of discussions to be held with the airline, whose board needs to vote on the deal and was to meet today.
The agreement with the Commission was “very good news for Air France and for the whole French aviation sector,” Le Maire said, adding that negotiations had been “tough.”
The minister declined to say how many slots at Orly Air France would have to give up, but said it would be fewer than the 24 that the commission had initially asked for.
The French government has already given “a lot of help” to Air France to weather the COVID-19 crisis with an initial sum of 7 billion euros and would “not sign a blank check” this time around, Le Maire said.
“There are tens of thousands of jobs involved. Air France is strategic for our country,” he said.
The carrier must become more competitive and continue to reduce carbon emissions, he said.
“The taxpayer is making an effort, and Air France must also make an effort,” Le Maire added.
A European Commission spokesperson said that the executive was in contact with the French government but could not “predict the timing or outcome of these contacts.”
According to EU rules, any government granting more than 250 million euros in aid to a company with “significant market power” had to propose additional measures to safeguard competition, the spokesperson said.
Any fresh capital for Air France would be scrutinized not only by the EU, but also by the carrier’s competitors, which want to make sure that the playing field remains level.
The Air France plan comes as France faces rising deficits and debt because of a weaker economic rebound than hoped.
The annual deficit, which has spiraled as French President Emmanuel Macron’s government tries to prop up the struggling economy with massive spending, is expected to reach 9 percent of GDP this year, Le Maire said.
This compares with an 8.5 percent estimate included in the government’s budget plan for this year, and a three percent deficit limit that EU members must usually respect, but have swept aside as they deal with COVID-19.
RETAIL BANKING EXIT: Clients are concerned whether their rights would be protected, while employees were caught by surprise as the bank had just upgraded its services Citibank Taiwan Ltd (花旗台灣) yesterday said that credit card clients could continue using their cards as operations would continue normally until it sells its consumer banking business. As of February, the bank had 2.86 million credit cards in circulation in Taiwan, of which 2.17 million had been used in the past six months, ranking it sixth among all banks, data from the Financial Supervisory Commission showed. Credit card spending by Citibank clients totaled NT$15.66 billion (US$552.6 million) in February, also ranking sixth among banks in Taiwan. Citibank was the only foreign bank that made it into the top six. Customers should not
PANDEMIC EFFECT: Chromebook shipments in the first quarter more than tripled from a year earlier, driven primarily by educational institutions in North America Despite a semiconductor shortage, global PC shipments in the first quarter of this year increased 32 percent from a year earlier, preliminary data from research firm Gartner Inc showed. Shipments in the January-to-March period totaled 69.87 million units from 52.93 million units a year earlier, Gartner said in a report on Monday last week. The quarterly increase in shipments marked the fastest annual growth since it began tracking the PC market in 2000, Gartner said. “This growth should be viewed in the context of two unique factors: comparisons against a pandemic-constrained market and the current global semiconductor shortage,” Gartner research director Mikako Kitagawa
NO MONEY LAUNDERING: Banking Bureau Deputy Director-General Lin Chih-chi said transactions of more than NT$500,000 conducted in cash would need to be reported The Financial Supervisory Commission is to set up new money laundering regulations for the nation’s cryptocurrency exchanges from July 1, requiring them to report transactions valued at more than NT$500,000 (US$17,770), the commission said yesterday. The move came after the Executive Yuan earlier this month demanded that the commission establish regulations to prevent money laundering in the cryptocurrency industry. The cryptocurrency industry includes local trading platforms for cryptocurrencies, cryptocurrency wallet providers and firms that conduct security token offerings, the Executive Yuan said. The commission plans to require cryptocurrency exchanges to report any transaction of more than NT$500,000 conducted in cash, or an equivalent
TREASURY REPORT: A US government report urging the central bank to curtail its foreign-exchange intervention, coupled with soaring exports, might lift the NT dollar The New Taiwan dollar yesterday posted its biggest daily advance since December last year after a report by the US Department of the Treasury last week hinted that US President Joe Biden’s administration could exert greater pressure on Taiwan’s central bank to allow the local currency to appreciate. The NT dollar rose 0.5 percent to close at NT$28.205 against the greenback, and was emerging Asia’s best-performing currency for the day. While the Treasury report on Friday did not label Taiwan as a currency manipulator, it said the US would initiate “enhanced bilateral engagement” to address what it considers as “structural undervaluation”