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French government all set to fully privatise Paris airports

The French government is set to launch its first major sell off with Paris airports set to go under the hammer.

French government all set to fully privatise Paris airports
Photo: AFP

The Local reported back in December last year that President Emmanuel Macron was planning a spring clear out with a raft of privatisations in the hope of raising more than €10 billion.

The first asset to be sold off will be the Aeroports de Paris, the group which runs the French capital's three airports – Orly, Charles De Gaulle (CDG) and Le Bourget.

Passengers who have ranked Orly and CDG airport among the worst in Europe will no doubt be hoping that any privatisation will improve their all-round experience of travelling through the French capital's two hubs.

The French state owns a 50.6 percent stake in the company and appears ready to sell the whole lot.

It could earn up to €8.2 billion if it sold its 50.6 percent stake in a company worth €15 billion. Although it looked likely that the government would hold on to part of the group, which has seen its value triple since 2012.

France's Prime Minister Edouard Philippe will meet with his economy minister Bruno Le Maire and Transport Minister Elisabeth Borne on Saturday to finalise the sell-off.

To pave the way for the sell-off the government will have to introduce a new law that allows them to flog their total stake. Currently the law states that they must own at least 50 percent of the capital in the group.

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Sources close to the government told BFM TV that there are enough safeguards in place over security and the 6,600 hectares of land that the airports Orly and Charles de Gaulle are built on that ministers believe the state does not need to hold on to any of its stake.

The state envisages however putting a time limit on how long a private company can operate the airports for before the contract is up for renewal.

“It is out of the question to give a private actor the running of the airports for eternity,” a source told BFM TV.

An operating licence of between 70 and 90 years will be imposed on any buyer in order to be long enough not to devalue the company or hamper any privatisation.

According to reports a number of groups have already expressed an interest in purchasing the government's stake. The favourites appear to be French group Vinci, which already owns an 8 percent stake.

In a 2017 survey Paris-Orly and Paris-Charles-de-Gaulle, which represent 52.1 percent of all French air traffic, ranked near the bottom of the pack for European airports in a survey from consumer magazine UFC-Que Choisir.

RYANAIR

Ryanair demands that Air France give up French airport slots in exchange for state aid

Budget airline Ryanair urged on Wednesday that Air France be forced to give up lucrative French airport slots if it receives more state aid.

Ryanair demands that Air France give up French airport slots in exchange for state aid
Could Air France be forced to give up airport slots if it accepts more aid from the French state? Photo: AFP

Paris is in talks with European Union officials on the delicate issue of state aid to the French flagship carrier, which has already received substantial help from the government.

“Should yet another enormous and illegal state aid bailout occur, then effective remedies must be applied to ensure fair competition in the French market and to protect the interests of the French consumer / visitor,” a Ryanair statement said.

The low-cost airline is based in Ireland and regularly underscores the amount of money being allocated to keep struggling rivals in the air.

In exchange for more aid, Air France must be prepared to give up “a substantial number of its take-off and landing slots at key French airports including Paris Charles De Gaulle, Paris Orly and Lyon,” Ryanair argued.

French officials and the European Commission are currently discussing the terms of a further recapitalisation of the Air France-KLM group, which has suffered from the Covid-19 crisis.

EU officials have already indicated that in exchange for their approval, Air France should give up coveted slots at Paris' Orly airport, which is essentially saturated now.

Air France on the other hand has indicated that such a move posed a serious threat because it was counting on Orly operations to help it rebound from the crisis.

French officials want to avoid putting Air France, which was struggling even before the pandemic, at a competitive disadvantage.

Ryanair urged EU competition chief Margrethe Vestager to “stand firm in her discussions with the French government.

“Either Air France gets no state aid or proper remedies should be put in place to ensure a fair and level playing field for all airlines,” it insisted.

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