"We need to save our national company," French Finance Minister Bruno Le Maire told national television TF1 Friday, describing the plan as "historic support".
France will issue 3 billion euros in direct loans and guarantees on another 4 billion euros in bank lending to the carrier, part of airline group Air France-KLM.
"Air France's planes are grounded, so we need to support Air France and the 350,000 direct and indirect employees affected," Le Maire said.
The loan was not a blank cheque, Le Maire warned. In exchange for the bailout the government will set conditions of profitability and more environmentally sustainable, less polluting policies.
Les prêts à Air France ne sont pas un chèque en blanc, nous avons fixé des conditions : le groupe devra à nouveau être compétitif et surtout devenir la compagnie aérienne la plus respectueuse de l’environnement de la planète. #Le20H @TF1 pic.twitter.com/DuLE41lpqU
— Bruno Le Maire (@BrunoLeMaire) April 24, 2020
Green groups furious
"Air France should become the most environmentally respectful airline in the planet," he said, urging the carrier to "present a plan for reducing CO2 emissions and transforming its fleet to be less polluting."
Environmental groups wasted little time in reacting to the news.
Greenpeace issued a statement on Saturday warning that sweet talk was not enough.
"Beyond the mantra, we want to know exactly how Air France will make its green transition when there is absolutely no constraint, no sanction, and no ambition mentioned at all in its second supplementary budget," wrote Sarah Fayolle, Greenpeace's Transport campaign director.
"Further more, what guarantees do we have that they will come up with a 'climate plan' given that there is no transparency," she said.
Ce sera donc 7 milliards d'euros qui seront injectés pour sauver #AirFrance.
— Sarah Fayolle (@SarahFayolle) April 24, 2020
Avec a priori un "plan écologique"... mais avec quelle contrainte, quelle ambition et quels moyens de sanction sachant que rien n'a été inscrit dans ce sens dans la loi ?!#PLFR2https://t.co/crBxvoQpxi
In The Hague, Dutch Finance Minister Wopke Hoekstra announced the government plans to support KLM with an aid package worth between two to four billion euros.
Lifeline crisis
The deals offer Air France-KLM a lifeline as airlines fight to survive the worst crisis in the industry’s history.
In a video message to staff, Chief Executive Ben Smith said the aid was "not a blank cheque" and would require tough action on costs and performance.
The bailout comes amid tensions between the French and Dutch governments, which each hold close to 14 percent of Air France-KLM.
The company said Paris was likely to increase its investment over the coming year, although Le Maire has denied that nationalisation was on the cards.
The French government is also preparing to back about 5 billion euros in loans to carmaker Renault, in which it is a majority shareholder.
"What is at stake here is our automobile industry. Renault is an industrial flagship that belongs to our culture and history," Le Maire said.
"This crisis is historic. It will last years. It will be long. It will be difficult. I want every businessperson to know that... the state will be beside them," he added.
