OPSI COVID-19 Innovative Response Tracker

France bails out AirFrance on the condition they cancel domestic flights competing with trainlines

Innovative response

France has launched a €7bn bailout to help Air France deal with the economic fallout, but with various innovative environmental conditionalities attached.

The support will include a state guarantee on loans and a subordinated shareholder loan to the company by France.

The money is contingent on the carrier reducing pollution by scrapping certain domestic flights, in which travelling by train is a viable option.

Economy and Finance Minister Bruno Le Maire  said the coronavirus crisis provided an opportunity to "reinvent our model of economic development to ensure it is more respectful of the environment".

Specific issues addressed and anticipated impact

AirFrance are an important company for France that are still performing certain key flights, both domestically and internationally, including the repatriation of French citizens from abroad. However, airline companies are heavily subsidised by governments and are some of the worst carbon emitters. This conditional bailout highlights how governments may use this situation to start to generate better future solutions through their financial interventions for the crisis now.

Organisations/institutions involved

French Ministry of Economy and Finance

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Issues being addressed:

  • Governance responses