Summary
- The EU is investigating Corsair’s recent financing plan.
- The plan has been described as an adjustment to the initial one revealed in 2020.
- Rivals, including Air Caraïbes and French bee (a part of the Groupe Dubreuil), have underlined their concerns with the brand new restructuring proposal.
In financial trouble, French airline Corsair had reached out to shareholders (each existing and prospective) and the French government for help. Now, the financing plan has been revised, forcing the European Commission to open an investigation firstly of this 12 months into whether it respects EU state aid rules. As a part of this investigation, France and have been invited to submit comments; Air Caraïbes and French bee, unhappy with what the brand new plan means for Corsair, didn’t hesitate to reply.
Among the many issues on the table is Corsair’s intention to deviate from its primary goal of being a key player in essential air connectivity for overseas France by launching a brand new flight connecting France with the Republic of Congo. Other points of contention include the carrier’s fleet growth despite its financial difficulties and former agreements, and its inability to create jobs to the identical extent as Air Caraïbes.
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A Temporary Guide To The Most important Airlines Serving France’s Overseas Territories
The right way to travel to and from the far-reaching French lands.
The 2020 financial aid
In December 2020, the European Commission approved €106.7 million ($116 million) in restructuring aid for Corsair and €30.2 million ($33 million) in compensation for the impact of presidency restrictions on air travel in the course of the COVID-19 outbreak. Brussels deemed that the financing was according to state aid rules and noted that it might be “ Per the Commission, the restructuring foresaw the next measures:
- A discount in staff costs
- The concentration of Corsair’s activities on its core profitable routes to French overseas territories
- The optimization of the fleet and abandonment of loss-making routes
As a part of these, Corsair committed to refrain from involving itself in other corporations through interests or holdings, to take care of its fleet capability at current levels, which incorporates already-anticipated aircraft orders (particularly for the A330neo), to stop opening recent routes apart from those already within the restructuring plan, and to divest slots. As well as, the carrier agreed to suspend its Paris to Miami service and relieve its customer support operations at Paris’ Orly Airport.
A brand new plan including Africa?
A few of Corsair’s biggest rivals and the owner of Air Caraïbes and French bee (the Groupe Dubreuil) have expressed doubts over the newest update to the plan, which they see as an extension to the 2020 plan.
The European Commission describes it as an although providing no specifics. Le Monde, nevertheless, revealed that the brand new plan includes the waiver or relinquishment of greater than €147 million in taxes and social debt.
The CEO of Groupe Dubreuil, Christine Ourmières-Widener, believes this adjustment ought to be considered a separate plan because it breaches the terms of the initial agreement. Particularly, Corsair expressed interest in flying from Paris to Brazzaville in Congo by the top of 2024. This got here after the country reportedly agreed to offer €15 million in financing in exchange for a stake within the airline. Talking to Les Challenges, Ourmières-Widener said:
Regional jealousy?
The problem of competition is a necessary discussion on the subject of Overseas France. A scarcity of connectivity can have disastrous effects, given that the majority of those regions are islands. The CEO of Corsair, Pascal de Izaguirre, said:
“For the Groupe Dubreuil, there’s an obvious interest in our disappearance, as it might be the jackpot for them: they might find themselves as two with Air France within the Antilles, a market of nearly 3 million passengers, and as three in La Réunion with Air Austral.”
“Due to this fact, if the Groupe Dubreuil finds itself in a duopoly with Air France, it might not be good for the competition at a time when members of parliament within the French overseas territories and most of the people are complaining about prices.”
Growth despite the 2020 limits
Corsair’s rival can be complaining in regards to the airline’s fleet expansion despite the 2020 requirement to take care of fleet capability at current levels. Corsair said that while its fleet can have grown in pure numbers, it still abides by the 2020 agreement, provided that overall capability has been reduced.
“The move to 10 planes doesn’t generate a rise when it comes to seats: before, we had Boeing 747s with 532 seats. Now, we’ve the A330s that are much smaller.”
In an April interview with Les Challenges, the Corsair CEO underlined the measures the carrier had taken within the years following the initial agreement.
“We have now renegotiated our aircraft leases and renewed our fleet: by November, we could have received our ninth A330 Neo to switch our old Boeing 747s. And we’ve taken strong social measures: redundancy plan, collective severance pay, outsourcing.”
The Groupe Dubreuil also noted its critical economic role and said that providing aid to Corsair would risk its own sustainability. Ourmières-Widener said:
“We do not understand the logic: we’re the one player creating jobs in Overseas France -with over 600 employees- where we’re based, and [combined with] the announced recruitment of cabin crew in Guadeloupe and Martinique, and the sort of aid could hinder our development by creating unfair competition!”
The final result of the European Commission’s investigation will probably be decisive for Corsair’s future. Despite the airline’s assurances that it just isn’t experiencing financial difficulty, it needs help to make sure its continued restructuring.