Air France and KLM have signed two new credit facilities with financial terms linked to achieving certain sustainability and other ESG (environmental, social and governance) targets.
The sister airlines and parent company Air France-KLM have agreed the revolving credit facilities for a total of €2.2 billion with a pool of international banks.
The cost of these arrangements to the airlines, which can go up and down, will be linked to achieving ESG-related key performance indicators (KPIs), such as the reduction of CO2 emissions and increasing the share of sustainable aviation fuel (SAF) used for flights.
“These indicators are in line with Air France-KLM and the two airlines’ commitment to sustainable development and a gradual decarbonisation of activities,” said the company in a statement.
KLM’s new €1 billion credit facility also allows the airline to cancel the €3.4 billion support package provided by the Dutch government during the Covid-19 crisis. This includes both the remaining part of the direct loan from the government and its 90 per cent guarantee of KLM’s previous credit facility.
Marjan Rintel, KLM’s CEO, said: “It’s encouraging news that we can stand on our own feet again after such a difficult period. This is also due to the efforts of all KLM employees and the loyalty of our customers. We are grateful to the Dutch government for its support during the coronavirus crisis.
“Our focus remains on meeting our sustainability targets and staying financially healthy through achieving structural cost savings.”
Air France-KLM is looking to build ESG into its finance arrangements – the company also launched its first sustainability-linked corporate bond in January 2023.