France has called on the Netherlands to clarify its intentions after it raised its stake in the holding company Air France-KLM. The Dutch made the moves without telling their French counterparts.
Speaking in Paris alongside Chancellor Angela Merkel on Wednesday, President Emmanuel Macron said the Dutch government must clarify why it bought 12.7 percent of shares in Air France-KLM's holding company.
"The government was not informed of this decision, nor its implementation," Macron said at a press conference in Paris. "I take note of it. It's now up to the Dutch government to clarify its intentions."
Later Wednesday, the Dutch government said it had increased its stake even further — to 14 percent — which nearly matches the French state holding of 14.3 percent.
"The Dutch state has bought a 14 percent stake in Air France-KLM," the Dutch government said in a statement, adding that the "buying of Air France-KLM shares has been halted."
Dutch Finance Minister Wopke Hoekstra announced the initial purchase of the 12.7 percent stake late Tuesday for €680 million ($774 million). He said then that the government aimed to eventually match the French government's 14.3 percent holding in the airline.
Air France-KLM shared plunged 11.7 percent on Wednesday after the Dutch government's announcement.
An eroded position
Hoekstra made the motive for the move clear: "KLM's position has been constantly eroded over the past few months," Hoekstra said. "We now have a seat at the table."
There have been concerns from the Netherlands that the Air France's new CEO, Ben Smith, wants to move more KLM flights to Paris from Amsterdam's Schiphol airport so as to compete more effectively against German flag carrier Lufthansa, Spain's Iberia and British Airways.
It also follows the Dutch government's decision to back KLM chief executive Pieter Elbers amid reports of tensions between him and Smith.
French Finance Minister Bruno Le Maire said he would hold talks with Hoekstra in Paris this week over what he termed an "incomprehensible" move.
The Air France-KLM board held a meeting on Wednesday, saying it would "closely monitor the consequences" of the Dutch shareholding.
As the major shareholder in the airline, the French state enjoys voting rights of about 23 percent in Air France-KLM.
Yet KLM contributed around 80 percent of group's operating profit in 2018. By comparison, strikes have hampered Air France's performance in recent years.
jm/amp (Reuters, AFP, AP)