Air France-KLM, the airline group comprised of Air France and KLM and their respective subsidiaries, announced that it has fully repaid its state-guaranteed loans given out by the French government.
The Franco-Dutch airline group repaid the remaining €2.5 billion ($2.6 billion) from an initial €4 billion ($4.2 billion) loan guaranteed by the French government in order to preserve businesses during the COVID-19 pandemic and subsequent lockdowns. France launched the state-guaranteed loan (prêts garantis par l’État – PGE) program in May 2020, lending around €145 billion ($153 billion) to businesses across the country at the end of 2021.
According to Air France-KLM, strong revenues, improved operating results, and finally, a profit at the end of 2022, resulted in the group having €10.6 billion ($11.2 billion) of cash at hand. Furthermore, €1 billion ($1.06 billion) of proceeds from the sustainability-linked bond, which was issued in January 2023, allowed the airline group to “accelerate and close the repayment in full of the outstanding PGE”.
As outlined in the company’s FY2022 financial results presentation in February 2023, Air France-KLM “reached an agreement with the French State and the syndicate of nine banks participating in the “PGE” to proceed with the full repayment” of the loan.
“This full repayment will contribute to smoothing the Group’s debt profile, reduce financial costs and limit residual exposure to floating rates, and marks a final step towards the full repayment of the current French State liquidity support measures,” Air-France-KLM noted in its filing on March 15, 2023.
In total, the group earned €26.4 billion ($28 billion) of revenue in 2022, ending the year with €700 million ($743 million) of net income. In total, the operating free cash flow was €1.9 billion ($2 billion) and at the same time, Air France-KLM reduced its net debt by €1.9 billion ($2 billion) in 2022 compared to 2021.
