Air France-KLM wants to be free of bans on acquisitions as soon as it can by repaying state aid. To do so, the Financial Times wrote, the group plans to raise €4 billion (about $4.5 billion) in new capital.
According to Ben Smith, the executive in charge since 2018, the group is also looking into a “plan B” by expanding low-cost routes.
He also wants to further integrate the airlines in another bid to save money. That would require him to overcome resistance from KLM, a Netherlands-based carrier. Air France and KLM merged in 2004.
Air France-KLM got €10.4 billion in support at the beginning of the pandemic in 2020 through direct French and Dutch state loans. A €4 billion recapitalization was backed by Paris last year. That included the ban on acquisitions.
This has stifled the group’s expansion plans in areas like cargo or maintenance. It’s especially troublesome because a rival airline, Lufthansa, has been circling Italy’s ITA airways.
Smith is looking to mend ties with French unions in a way to restructure the Air France part of the group, following job cuts in the last two years totaling around 8,000.
According to the report, the airline is looking into raising up to €4 billion to repay state aid. Its options include a rights issue and quasi equity debt issues.
The group revealed the plans as it reported revenues were improving, along with a lower-than-expected loss for 2021.
That came as the fourth quarter saw operating income above pre-pandemic levels, with long-haul flights picking up again.
Related: Delta Launches BNPL Offering With AmEx
Airlines were hard-hit from the pandemic and are now trying to build back up. One way Delta has been doing that is by offering buy now, pay later (BNPL) with the American Express Plan It tool.
AmEx card members choose from BNPL options when booking Delta flights.
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