Dutch court ruled that the Dutch government is not required to attach climate conditions to its bailout for KLM
Earlier in the year, Air France-KLM received around €10 billion in various loans, to get it through the Covid pandemic. It then asked for another €6 billion in November. In June there was the suggestion that this government money was only given with various conditions, such as that the number of night flights from Schiphol will be cut, and KLM will have to halve CO2 per passenger-kilometre by 2030. In September, Greenpeace Netherlands took legal action against the Dutch government, for not imposing climate conditions to bailout funding. Now the Dutch court has ruled that the Dutch government is not required to attach climate conditions to its bailout package for KLM. Greenpeace had argued that the bailout conflicted with the duty of care of the Dutch state towards the population. Greenpeace said the verdict is “a missed opportunity for our present and our future. It’s incredibly disappointing to have a government that actually uses state aid to enable KLM and other major polluters to continue wrecking our planet.” Campaigners are not deterred. Changes could be required, such as scrapping all short-haul flights of under a thousand kilometres, like the many each day to Brussels or Paris.
DUTCH PEOPLE WILL PAY FOR KLM TO CONTINUE POLLUTING
Greenpeace Nederlands (Amsterdam)
9 december 2020
‘Dutch government off the hook to set climate conditions on KLM bailout package’
The Dutch court ruled today that the Dutch government is not required to attach climate conditions to its bailout package for KLM. Filed by Greenpeace Netherlands, the lawsuit argued that this bailout conflicted with the duty of care of the Dutch state towards the population.
The court referred to the international agreements for the aviation industry, but understood Greenpeace’s criticism that these existing climate goals are insufficient.
“Today’s verdict is a missed opportunity for our present and our future. It’s incredibly disappointing to have a government that actually uses state aid to enable KLM and other major polluters to continue wrecking our planet.
“This multibillion bailout could be a golden ticket to tackle multiple crises from the root, when if not now? The government should demand better performance from KLM now that we are bailing them out, like gradual carbon emissions reduction and better conditions for the company’s staff. The cabinet should listen to widely popular green recovery measures,” said Dewi Zloch, Climate and Energy expert at Greenpeace.
Government still under pressure
“This verdict doesn’t take the pressure off the government to tackle the pollution caused by aviation. The current bailout package enables KLM to keep recklessly polluting while other companies, and our country, are under heavy scrutiny to reduce their carbon emissions.
“The Dutch commitment to the Paris Agreement is to decrease those emissions every year, which translates to industry meeting those targets as well. The aviation industry has to become more sustainable inevitably and we will continue to push for it. Now we are twice as motivated to take action,” Zloch said.
“The number of flights should be significantly reduced for instance. KLM could start by scrapping all short-haul flights of under a thousand kilometres, like the multiple daily ones to Brussels or Paris. We need to significantly transform our transportation systems to address the climate impacts we are already facing,” Zloch concluded.
Air France-KLM seeks new €6bn bailout
Additional funding for Franco-Dutch airline would be on top of government loans worth more than €10bn dished out earlier this year
By Bloomberg News
18 November 2020
Europe’s biggest airline bailout is poised to get bigger, as Air France-KLM targets as much as €6bn (£5.3bn) of fresh funds to get through the Covid pandemic.
The French and Dutch governments are discussing providing support to the struggling carrier by the end of the year, according to sources.
Air France-KLM shares fell more than 6pc on Wednesday after Le Monde first reported the story.
The loss-making airline is in talks to receive a capital injection of €3bn from France and €1bn from the Netherlands, the newspaper reported. The plan would aim to keep the existing shareholder balance and avoid a nationalisation.
“There is no hurry, but we cannot wait till the end of 2021,” Dutch finance minister Wopke Hoekstra said. “It will be a discussion for the upcoming months or half a year.”
The French finance ministry said Air France “has no short-term need for cash” and that the two countries are considering the best ways to render the company’s balance sheet sufficiently solid.
An Air France-KLM spokeswoman declined to comment.
The funding would come on top of a €10.4bn government bailout earlier this year. The cash helped the airline through the initial shock of the global pandemic that grounded jets worldwide and laid low airlines.
However, the aid came in the form of direct loans and guarantees that left Air France-KLM with too much debt and operations that have yet to recover amid a resurgence of the virus.
The new funds could come in two stages, with the airline raising an additional €2bn from capital markets in the first quarter of next year, according to Le Monde. The operation could include the issuance of so-called “hybrid” loans.
Structuring the package to avoid nationalisation will be critical given France and the Netherlands each own a 14% stake. It’s not clear whether any of the existing bailout loans would be converted into equity.
French transport minister Jean-Baptiste Djebbari said last month that the talks will raise fundamental questions about the way Air France-KLM, created in a merger more than 15 years ago, is structured and backed by the two countries.
Last month, the Dutch government approved its €3.4bn share of the first bailout after a showdown with KLM pilots over pay.
French finance minister Bruno Le Maire has said the state could provide more aid, but nationalisation was not the right solution.
Air France-KLM is considered a matter of national sovereignty for the French government, which has vowed to plough more public funds into the carrier to help it survive.
The carrier, which employs about 90,000 people, has enough liquidity for the short-term, chief executive Ben Smith told Les Echos earlier this month.
Air France has accelerated a job-cutting plan to include the equivalent of 8,500 positions by 2022, while KLM plans to eliminate as many as 5,000 workers this year.
Greenpeace Netherlands is going to court to force the Dutch government to discontinue their bailout for KLM
Greenpeace Netherlands is going to court to force the Dutch government to discontinue their bailout for airline KLM, because climate conditions are lacking. As a first step, Greenpeace formally informed the government. This lawsuit could potentially have important consequences for other airline bailouts. Just in Europe alone, governments have supported the airlines with €32.5 billion so far. A spokesperson said the Dutch bailout “fuels the climate crisis, breaking the duty of the Dutch government to protect its citizens.” KLM does not have a solid climate action plan and the environmental policy for aviation from the Dutch government is inadequate. The bailout is not even definitely saving many jobs in the airline. Vague hopes that in future electrical planes or planes that fly with sustainably sourced fuel, will not be available before too long are unrealistic. Therefore the number of flights needs to reduce substantially, and Greenpeace says this should start with revoking short-distance flights under a thousand kilometres. KLM was responsible for 8.6 MtCO2 emissions in 2018.
Dutch government KLM €3.4 billion rescue plan, with some conditions
The Dutch government has said the national airline, KLM, is set for a €3.4 billion bailout package, if it meets certain targets, but this still requires regulatory approval from Brussels, in case it conflicts with EU state-aid rules. KLM was promised between €2-4 billion at the end of April, when both the Dutch and French governments pledged financial support to the Air France-KLM group. France’s €7 billion bailout was quickly approved by the EC’s competition regulators. The €3.4 billion package would be made up of €2.4 billion in state-guaranteed bank loans and a €1 billion direct loan. The loan would be provided in tranches and last up until 2025, with each payment only made after the government has judged that conditions are being adequately fulfilled. Senior staff who earn more than three times the average salary will have a 20% pay cut. Until the state’s investment is repaid in full, no dividends will be paid out to shareholders and management will not get bonuses. Cost-cutting measures worth 15% will have to be made. The number of night flights from Schiphol will be cut, but details are not yet decided. KLM will also have to halve CO2 per passenger-kilometre by 2030, BUT there is no cap on KLM’s total CO2 emissions.