The European Commission (EC) has approved EUR1.4 billion euros (USD1.48 billion) in state-granted Covid-19 compensation to Air France (AF, Paris CDG).
In a statement on February 16, the EC said the French state aid covered the pandemic period between March and June 2020. The aid will be granted in several tranches and may take the form of grants, equity support, or liquidity support.
It follows EUR7 billion (USD7.4 billion) in liquidity support for Air France approved by Brussels on May 4, 2020, and EUR4 billion (USD4.2 billion) to recapitalise the airline approved on April 6, 2021.
The EC said the compensation was in line with European Union state aid rules, which enable member states to compensate companies or sectors for the damage caused by exceptional occurrences, such as the COVID-19 outbreak.
On March 19, 2020, the EC adopted a COVID Temporary Framework for state aid, which expired on June 2022. Still, investment support to help private companies recover sustainably and solvency support to leverage private funds and make them available for investments in small and medium-sized enterprises (SMEs) may still be implemented until December 31, 2023.
Until June 30, 2023, the COVID Temporary Framework provides for the conversion and restructuring of debt instruments, such as loans and guarantees, into other forms of aid, such as direct grants.
On March 23, 2022, the commission adopted the State Aid Temporary Crisis Framework to allow EU member states to provide economic support following Russia’s war on Ukraine. This has twice been amended to address high energy and gas prices during the European winter.
