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KLM Repays Dutch Government Pandemic Aid Loan
KLM Royal Dutch Airlines completed the repayment of the last part of the loan it had agreed with the Dutch State and private banks in 2020. With the repayment of 277 million euros, the Netherlands’ largest airline finally returned the amount received as part of the aid package to cope with the complications unleashed by the pandemic.
Like many other airlines, KLM relied on financial support from public sources to sustain its capacity during downturns.
Of the 3.4 billion euro credit line, the company drew down a total of 942 million euros. By the beginning of the year, it had completed two repayments. Increased demand for air travel, the cessation of mobility restrictions and greater efficiency in its cost structure made the repayment possible, KLM said.
The company repaid the full 665 million euros from banks in three stages. It paid 311 million euros on May 3 and a further 354 million on June 3. All that remained was to complete the repayment of 277 million euros to the Dutch State.
In an official statement, the company said it is “very grateful to the Dutch government and the banks for their support.” The text adds that “with this step, KLM demonstrates that it takes its responsibility and keeps its promises to financiers, government and society.”
Pieter Elbers, CEO of KLM, highlighted the work of all KLM employees during 2020 and 2021: “I would like to thank all KLM colleagues for this», he said. Furthermore, he assured that «the current operational situation at Schiphol is also tough and, again, demands a lot from our people and our customers.”
While the airline industry has been showing definite signs of recovery for months now, KLM has decided to maintain its credit line for the foreseeable future. Rising inflation levels, increasing fuel costs and other input prices, along with geopolitical uncertainties surrounding the Russian invasion of Ukraine, maintain a veil of uncertainty over the state of the airline business in the coming months.
After completing the repayment of the money used, the company will continue to have a credit line of 2.4 billion euros (723 million from the government and 1.735 billion from Dutch banks). Despite this, current forecasts are positive in terms of available financial resources for the coming years.
This story was originally published by Agustin Miguens of Aviacionline in syndication with AirlineGeeks.
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