(Bloomberg) -- The Netherlands took a 13 percent stake in Air France-KLM Group and is seeking to expand its power at the airline by building up its holdings to 14 percent, similar to the level held by the French government.
- “There was simply too little influence from the state in KLM to be able to look after the Dutch public interest well, and to make a success of KLM,” Dutch Finance Minister Wopke Hoekstra told reporters late Tuesday. “This step shows our long-term commitment to the entire company.”
Key Insights
- The move risks reigniting tensions between the Dutch and French operations of Air France-KLM just as pressure was easing after the company considered replacing KLM boss Pieter Elbers.
- Chief Executive Officer Ben Smith had engineered a solution to the recent crisis by retaining Elbers and taking a seat on the Dutch operation’s semi-independent board.
- The position of KLM and Schiphol Airport are of great importance to the Dutch economy and employment, Hoekstra said. But decisions on KLM’s strategy more frequently were being made at the level of Air France-KLM’s holding company, Hoekstra said.
- The Dutch government said it continues talks with Air France and the French government on state guarantees and the company’s governance. Agreements on the board and the position of Elbers already have been made, it said.
Market Reaction
- Air France-KLM has advanced 34 percent to 12.73 euros this year, outpacing IAG (LON:ICAG) SA and Deutsche Lufthansa (DE:LHAG) AG.
Get More
For additional details