Under the EU state aid rules, the European Commission has cleared EUR 3,4 billion in Dutch aid. The measure consists of a state guarantee on loans and a subordinated loan from the State to KLM. This will give society the liquidity it urgently needs in this outbreak of the corona virus. The measures were approved under the temporary support framework approved by the Commission on 19 March 2020.

Dutch support for KLM

KLM is a Dutch airline with a large network. It is part of the AirFrance-KLM group, in which the Dutch State has an interest. KLM is the second largest private employer in the Netherlands, with more than 36600 employees. KLM is also a company that is very important to the Dutch economy because it provides connections from the Netherlands to numerous European destinations, to Dutch overseas territories and to the rest of the world. Since the coronavirus broke out, KLM has also played an indispensable role in bringing citizens back to the Netherlands and in transporting medical equipment.

Executive Vice-President Margrethe Vestager, in charge of competition policy: 'KLM plays a crucial role for the Dutch economy in terms of jobs and access to the world. The crisis has hit the aviation sector particularly hard. With this state guarantee and loan from the State for a total of EUR 3,4 billion, KLM will receive the liquidity it urgently needs to deal with the consequences of the corona virus outbreak. The Netherlands has attached a number of conditions to the aid measure with regard to location, working conditions and sustainability. Very good. Member States can design measures themselves in such a way that they are in line with their policy objectives and the EU rules ”.

Due to the travel restrictions imposed by the Netherlands and many countries of destination to curb the spread of the corona virus, KLM was forced to significantly limit its services, resulting in high operating losses. With restrictive measures gradually easing from June 2020, passenger traffic is slowly recovering. KLM does not have sufficient liquidity to finance the gradual restart of its activities. Therefore, the support of the Dutch State is essential to get the liquidity needed to get through these difficult times. The Netherlands has also shown that all other possible ways of obtaining liquidity through the market have been explored and exhausted.

The Netherlands notified an aid measure to KLM under the EU state aid rules. This should allow the company to mitigate the negative effects of the coronavirus outbreak. In total, the measure amounts to some 3,4 billion euros. The above information is provided by the European Commission website posted through a press release.

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