Air France-KLM repays €1bn of outstanding state-backed loan

Air France-KLM announced the early repayment of €1 billion of the €3.5 billion outstanding on its French state-backed loan (PGE) due to “a solid improvement” in its operating performance”.

“Continuing the positive trend observed in the first half of 2022, Air France-KLM has reached an agreement with the French state and the syndicate of nine banks participating in the PGE to proceed with the early redemption of €1 billion out of the €3.5 billion outstanding,” the carrier said in a statement released on November 7, 2022.

“This early repayment will improve the Group’s debt profile by reducing financial costs and limiting exposure to floating rates,” Air France-KLM concluded.

The French government supported the airline during the COVID-19 crisis with a rescue package worth €4 billion in April 2021. It followed an earlier financing received in 2022, when it was given around €10.4 billion in loans backed by France and the Netherlands, two of the airline’s largest shareholders.

In December 2021, Air France-KLM managed to slash the €4 billion debt to France, making an early repayment of €500 million.

The airline has also agreed with the French government and banks involved in the deal an

further partial redemption of the debt, shrinking it by another €1.15 billion in May 2024.

Air France-KLM plans to make the final repayment of the remaining €1.35 billion in May 2025.