Dutch Finance Minister Wopke Hoekstra announced Tuesday that the government purchased 12.68 percent of shares in Air France-KLM S.A. The Dutch state already owns a 5.9-percent stake in KLM, the national airline of the Netherlands. Hoekstra said the holding company shares will allow the government to exert greater sway in strategic decisions about the alliance.
The announcement comes a week after Air France and KLM reached a compromise on tightening ties between the two airlines after fears of a power struggle alarmed the Dutch government, airline employees and shareholders.
Hoekstra said the government spent 680 million euros ($775 million) and plans to build up its stake to around 14 percent, almost equal to the French government's stake of 14.3 percent. "This shows our commitment to KLM and to the entire group," Hoekstra said. "We are convinced that this company can and must perform better in Europe. But that needs to go hand-in-hand with protecting Dutch and French interests."
KLM's success is closely intertwined with that of Schiphol Airport on the edge of Amsterdam; together, they generate tens of thousands of jobs and billions of euros in revenue. The airline has had layoff and cost cuts but is more profitable than Air France, which has faced extended labor disputes in recent years.
Air France-KLM CEO Benjamin Smith met Dutch government ministers in The Hague earlier this month to discuss the airlines' future. Dutch Prime Minister Mark Rutte declined at the time to give details from the discussion, but he stressed what was at stake.
"It is unbelievably important for the Dutch economy that KLM functions well," he said.