KLM Royal Dutch Airlines has secured state-backed loans amounting €3.4 billion (US $3.8 billion) to overcome liquidity shortages caused by the Coronavirus crisis.
The airline of the Air France-KLM Group will receive a credit facility of €2.4 billion from eleven different banks, including three Dutch ones. This loan with a maturity of five years is supported by the Dutch government, which is guaranteeing 90 percent.
Furthermore, the government of the Netherlands is also providing a direct loan of €1 billion to KLM. This credit comes with the condition for the airline to improve its sustainability and competitiveness.
In an investor release, KLM says the newly secured funding will be used to pay back an existing loan worth €665 million that was drawn in March this year for a first response to the Coronavirus pandemic. The company has also suspended dividend payments until the loans are fully paid back.
The package announced today is subject to approval by both the Dutch Parliament and the European Commission.
In May, sister airline Air France secured a €7 billion state-backed loan from the French government.
Jakob Wert is an aviation journalist from Germany. He built up the website IFN.news and is the Editor-In-Chief of International Flight Network.