Air France must cut emissions, domestic flights for aid: minister

PARIS (Reuters) - Air France will have to cut its carbon emissions and domestic flights as conditions for government financial support, France’s finance minister said on Wednesday.

FILE PHOTO: French Economy and Finance Minister Bruno Le Maire listens to French Prime Minister Edouard Philippe delivering a speech to present the French government's plan to unwind the country's coronavirus lockdown imposed to slow the rate of the coronavirus disease (COVID-19) at the National Assembly in Paris France, April 28, 2020. David Niviere/Pool via REUTERS

With the air travel industry among the worst hit by the fallout from the coronavirus crisis, the government offered the airline a 7 billion euro ($7.6 billion) package on Friday made up of state-guaranteed bank loans and loans directly from the state.

The aid was extended on condition that the airline map out a path to profitability and set the goal of becoming the most environmentally friendly carrier in the world.

Specifying those conditions, Finance Minister Bruno Le Maire told the lower house of parliament’s economics committee that the airline would have to cut its carbon emissions by half per passenger and per kilometre by 2030, from 2005 levels.

For flights specifically in mainland France, emissions would have to be halved by 2024, which Le Maire said meant that domestic flights would be “drastically reduced” to focus on serving hubs for transfers.

In a further condition, 2% of the fuel used by its planes would have to be derived from alternative, sustainable sources by 2025.

“Lastly, investments will have to be directed in the coming years to renewing the fleet of long and medium-range planes to more effectively fight emissions,” Le Maire said.

Earlier Le Maire told LCI television that the carrier would be expected to be a “good customer for Airbus”, adding that the government could also support the European planemaker “massively when needed”.

Airbus said on Wednesday that the coronavirus pandemic had triggered the “gravest crisis the aerospace industry has ever known” as it highlighted plans to save cash after burning through 8 billion euros in the first quarter.

Le Maire told lawmakers that support for Airbus could come in the form of expanded export financing aid and state-subsidised furloughs, along with airline fleet renewals, starting with Air France.

Meanwhile, the government was looking into setting up a sector-specific fund to support the aerospace supply chain, which could include banks’ participation, he added.

($1 = 0.9216 euros)

Reporting by Leigh Thomas; Editing by Alex Richardson