The share price for Air France-KLM fell sharply on Monday September 10, after it became apparent it was bidding for the now defunct Aigle Azur which filed for bankruptcy protection on September 2.
At the close of trading on Monday, the share price had fallen by 9.8%. While Air France confirmed it had placed a bid, no further information was forthcoming. Aigle Azur had fallen foul of a combination of increased low-cost flight competition and higher fuel costs, which had already seen the demise of other low-cost carriers including, Germania, Air Berlin, Skywork, Primera Air and the U.K.’s Monarch Airlines. The low-cost carrier’s principal shareholders are China’s HNA Group and Brazilian entrepreneur David Neeleman, and has also suffered from a failed expansion in transitioning from profitable medium-haul services focused on Algeria into a long-haul carrier providing services to Brazil.
Air France would be keen to pick up Aigle Azur’s prized take-off and landing slots at Paris Orly Airport, while also expanding into Algeria and Lebanon, the principal operating territory of Aigle Azur. Air France’s bid would likely see the salvaging of up to 70% of Aigle Azur’s staff positions for cabin crew and pilots through an open selection process. Additional letters of interest have been submitted by Air Caraibes owner Dubreuil Group and low-cost carriers Vueling and easyJet. A further bid was received from an investor group led by Lionel Guerin, former head of Air France’s Hop!.Email Post to a Friend