Air France-KLM Shares Plummet After Dutch State Bought Stake in Airline to Increase the Influence

A fight over influence on Air France-KLM reached its boiling point when the Dutch government unexpectedly bought a big stake in company.

The Dutch state has spent €680m to buy 12.7% of the company’s shares. On Wednesday evening the government announced that it had increased its stake to 14 percent and was aiming to match the French government’s stake, 14.3 percent.

This move took the market by surprise, the company’s share prices plummeted as much as 16  percent. The government’s increased stake is a ‘’fundamental step toward protecting Dutch interests,’’ said Dutch Finance Minister Wopke Hoekstra. ‘‘Buying this stake ensures we have a seat at the table.”

France and the Netherlands formed a strategic partnership of by merging their major carriers, Air France and KLM, in 2004. But both sides face continuing tensions, which peaked in February when hundreds of KLM employees gathered in Netherland’s office to support CEO Pieter Elbers, whom Air France planned to remove.   

“Several times in recent years, the Dutch interest was not given enough weight in important decisions for the company as a whole,” Hoekstra said in a letter to Parliament.

Not only does the Dutch government intend to protect jobs, but it also wants more influence on economic interests, including the status of Schiphol Airport in Amsterdam, which competes with Charles de Gaulle Airport in Paris.

French President Emmanuel Macron is now calling on the Dutch government to explain the stock purchase. “The government was not informed of this decision nor its implementation,” he said at a press conference in Paris. “I take note of it. It’s now up to the Dutch government to clarify its intentions,” said Macron.

The French press called the Dutch share purchase this move a “thunderbolt” and ‘‘stock market blitzkrieg.’’

By Natalia Kniazhevich