Air France-KLM & Lufthansa: survival cannot be "a given"

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French Finance Minister Bruno le Maire has said that France will "do what is necessary to guarantee the survival of Air France". Meanwhile, the Netherlands' Finance Minister Wopke Hoekstra has said that Air France-KLM's survival "is not a given", stressing that the group must reduce its cost base.

Air France-KLM's liquidity has been boosted by Europe's largest state aid package, but CEO Benjamin Smith told the French newspaper l'Opinion in an interview published on 21-Sep-2020 that the group had liquidity for less than 12 months. Yet it does not expect 2019 demand levels before 2024.

Lufthansa Group has the second biggest state aid in Europe. CEO Carsten Spohr has reportedly said that it has around 18 months of liquidity.

IAG's former CEO Willie Walsh has argued that, while liquidity is crucial, it is also vital to make structural reforms (usually a condition for state aid). IAG has received a fraction of the state support that Air France-KLM and Lufthansa Group have, but has long been ahead on restructuring.

Restructuring by the two biggest airline beneficiaries of state aid in Europe will only be truly meaningful if they believe survival is not a given.

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