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Dutch state buys stake in Air France-KLM to ‘increase influence’

February 27, 2019
Photo: Depositphotos.com
Photo: Depositphotos.com

The Dutch state has bought a large minority shareholding in the holding company of Air France-KLM in order to exercise more influence on the company, finance minister Wopke Hoekstra told a news conference on Tuesday evening.

In total, the Netherlands has bought 12.68% of the company for €680m on the open market, but plans to raise this to 14% – in line with the stake held by the French government.

The aim, Hoekstra says, is to better guarantee Dutch public interests. ‘The position of Schiphol and KLM are of great importance to the Dutch economy and employment,’ he said. ‘It involves thousands of direct and indirect jobs.’

In addition, KLM’s destination network is one reason so many foreign firms decide to relocate to the Netherlands, he said.

The Dutch move, which apparently was not shared with the French authorities ahead of time, follows a turbulent period for the company.

Holding chief Ben Smith is known to be keen to see Air France and KLM unify through common aircraft orders, alliances and flight programmes but the plans have caused unease in the Netherlands.

‘Over the past few years it has become obvious that important decisions about KLM strategy are being taken at a holding level,’ Hoekstra said on Tuesday evening. ‘At the same time, talks about strengthening existing agreements… and the make-up of the board, have been difficult.’

KLM also reports better financial results compared to Air France, which has been hit by strikes, even though it is much smaller.

France

French economic affairs minister Bruno Le Maire told Les Echoes that the shares had been bought up without prior knowledge of the Air France-KLM board or the French government.

The French government has a 14.3% stake in the holding, which was created in 2003 when the two airlines merged. The Dutch state retains a 5.9% stake in KLM itself.

‘The big question is, what will you achieve with this,’ aviation economist Eric Pels told broadcaster NOS. ‘It cost a lot of money, you don’t have a majority and you can’t sit in the chief executive’s seat. Operational decisions, the day to day affairs, are not taken together with shareholders.’

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