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Air France-KLM Raises €2.26bn From Latest Rights Issue

By Dave Simpson

French-Dutch airline Air France-KLM has said that it raised approximately €2.26 billion through its latest capital increase, with the total demand for new shares amounting close to 2.6 billion.

The proceeds from the rights issue will be mostly used to repay an aid package to the French state, and reduce related financial costs and other debt, the company said, confirming previously announced plans.

The airline launched the capital increase - a widely anticipated move - in May as part of its efforts to win shareholder backing to look beyond the pandemic and invest in the resurgent air travel.

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The issue was led by a big investment from logistics firm CMA CGM, which used it to take a 9% stake in the airline as it bet on growing demand for flying goods globally amid supply chain challenges.

The value of the equity stakes held by the French and Dutch governments, however, remained unchanged even after the issue, while a chunk held by China Eastern Airlines was diluted to 4.7% from 9.6% before the capital hike.

"The success of our capital increase is a strong demonstration of the confidence that our existing shareholders and new investors have in the prospects of Air France-KLM", the company's boss, Ben Smith, said in a statement.

Air France KLM CEO: Airline Is Ready To Cope With Strong Demand

The above news was followed by news that Air France KLM AIRF.PA is ready to cope with strong demand for travel, the company's chief executive has said, as travellers - hit by delays in recent weeks at airports - hope the global tourism industry can tackle staffing shortages.

"We have forecast that the summer will be very strong. We have hired 300 pilots, 300 mechanics. It will take some time to train them and get them ready. We have taken that risk. Our planes are ready to take off," Smith told BFM Business radio.

"At Air France KLM, we are ready. There is a lot of stress, but our teams have done a great job," he added.

Air France Expects No Disruption From 25 June Pilot Union Strike

All of the above news was followed by news that Air France AIRF.PA has said that it did not expect any disruption to its flight schedule after minority pilot union Alter called for a strike on 25 June at Air France and its low-cost unit Transavia.

"Since mid-2021, pilot hiring resumed by anticipation. The company has thus today enough trained staff to accompany an upturn in traffic," Air France said in a statement.

The union, which represents just over 10% of Air France pilots, has called for the strike to protest against labour conditions which it said could "lead to mounting safety risks".

Europe's aviation sector is looking forward to a peak summer season largely free of COVID-19 restrictions worldwide for the first time since 2019.

But airlines and airports are struggling to cope with a rebound in demand with staff shortages leading to cancelled flights and long queues.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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