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Air France-KLM is still flying just as low…


(Boursier.com) — Session still heavy for Air France-KLM this Friday, which dropped 1.2% to 1.268 euros in Paris, while the broker JP Morgan began monitoring the airline at “neutral” by targeting a price of 1.30 euros. The European Commission has issued a decision in favor of the ban on airlines in France, when there is an alternative of less than 2h30 by train. This measure is the result of the work of the Citizen’s agreement for the climate and emblematic provision of the climate law of 2021. It will have to be re-examined after three years…

Concretely, the measure must lead to the end of the connections between Paris (Orly) and Nantes, Lyon or Bordeaux, i.e. three out of more than 100 existing domestic air connections in France. Short flights intended to supply the hub at Roissy Charles de Gaulle airport to take a connection there will not be affected, the Ministry of Transport having confirmed this derogation to ‘Figaro’.

Traffic rights

In its article 20, the European regulation on air services provides that a Member State may, “where there are serious environmental problems, limit or refuse the exercise of traffic rights, in particular where other modes carriers provide a satisfactory service”.

“This is a major step forward in the policy of reducing greenhouse gas emissions, of which transport represents 30%”, welcomed the government in a press release. “Following this favorable decision, the government will submit the decree to public consultation, then to the Council of State, before its adoption, as soon as possible”.

The measure is contested by the main French airport association, the UAF, as well as the Scara (Union of Autonomous Airlines). Both point to the impact on travellers: in total, the Orly-Nantes, Orly-Lyon and Orly-Bordeaux lines represented in 2019 around 4% of French domestic air travel (excluding DOM-TOM and Corsica) i.e. 1, 1 million passengers, according to the specialized firm Archery Consulting.

“Not ambitious enough”

For its part, Greenpeace considers that the system lacks ambition, with a slider set at 2:30. “After long months of discussions, the decision of the European Commission therefore comes to act on a French measure banning short flights… which does not in fact prohibit much! Admittedly, the European Commission is tightening up the ban a little by including connecting flights, but it weakens it at the same time by only authorizing it for three years,” said Sarah Fayolle, transport campaign manager at Greenpeace France.

According to a report published by Greenpeace in October 2021, stopping the plane for the busiest flights in the European Union, when a train connection of less than 6 hours exists, would save 3.5 million tonnes of CO2 equivalent per year…

Fundraising

On the stock market, a little more optimistic, HSBC went from ‘holding’ to ‘buying’ on the airline group by targeting a price of 1.70 euros, while the company recently completed an offer of subordinated last ranking bonds open-ended, convertible into new shares and/or exchangeable into existing shares, for a nominal amount of around 300 million euros. The net proceeds of this placement will be used to repay “super subordinated securities” held by the French State. “The operation will necessarily be dilutive for the current shareholders of the carrier”.

Recall that the group announced in February that he planned to raise up to 4 billion euros in order to reimburse aid paid by France and the Netherlands to cope with the impact of the pandemic. “While most of its financial restructuring is behind it, Air France-KLM will consider, in 2022 and 2023, possible hybrid bond issues of up to €1.2 billion, subject to market conditions. “, underlined Davy Capital Markets.

The other concern comes from the strike notice filed by two Air France flight crew unions for the end-of-year holiday period: Unac and SGNAF accuse management of calling into question a collective agreement governing the conditions of the work of cabin crew members (cabin crew). The strike notice covers the period from December 22 to January 2…





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