Belgium, (Brussels Morning Newspaper) The European Commission has approved a French aid scheme worth 1.4 billion euros to compensate flag carrier Air France for the coronavirus crisis.
The body pointed out in a statement released on Thursday that Air France suffered damage due to restrictions imposed on travel in the period between 17 March and 30 June 2020.
It noted that Air France is an important part of the French economy and plays an important role in connectivity and employment.
The company suffered damage as a result of restrictions that the government put in place with the aim of curbing the spread of coronavirus.
“Because of these travel restrictions in place, the airline incurred significant operating losses and experienced a steep decline in traffic and profitability over this period,” the EC observed.
Previously approved aid
It noted that the measure comes on top of solvency support worth 7 billion euros approved in May 2020 and an additional 4 billion to recapitalize Air France approved in April 2021.
The Commission pointed out that the move is proportionate as the aid will not go beyond compensation and will make good the damage that Air France suffered under imposed restrictions.
The EC reminded that it adopted a temporary state aid framework in March 2020 to help EU member states to support their economies and make good the damage caused by emergency measures.
The framework also allows bloc members to convert and restructure debt instruments into other forms of assistance including grants.
“The COVID Temporary Framework complements the ample possibilities for member states to design measures in line with existing EU state aid rules,” the Commission stressed and added, “for example, EU state aid rules enable member states to help companies cope with liquidity shortages and needing urgent rescue aid.”
The body reminded us that it amended the framework in April, May, June, and October of 2020, and January and November of 2021.
In February this year, the EC proposed to transform the State Aid Temporary Crisis Framework into a State Aid Temporary Crisis and Transition Framework to strengthen and speed up the green push.
The body concluded that it plans to adopt the proposal in the coming weeks, after receiving feedback from bloc members.