Shares in Air France-KLM fell sharply on Monday after a French minister named Air France as a bidder for bankrupt carrier Aigle Azur, which left thousands of passengers stranded after abruptly halting operations, reports Reuters.
The French unit confirmed it had bid for all or part of Aigle Azur, without saying which, as rival Easyjet announced it had expressed interest in some operations of the budget carrier, which was placed under bankruptcy protection on September 2nd.
The Franco-Dutch carrier’s stock had fallen as much as 9.6% earlier in the day after junior transport minister Jean-Baptiste Djebbari said the group “appears to want to make an offer” for Aigle Azur.
The budget carrier’s two biggest shareholders are China’s HNA Group, with around an 48% stake, and Brazilian entrepreneur David Neeleman with a 32% holding.
Higher fuel costs and stiffer low-cost competition have led to a wave of bankruptcies among smaller European airlines in the past three years, including Air Berlin, Germania, British-based Monarch, Latvia’s Primera Air and Swiss SkyWork.
Aigle Azur’s difficulties were compounded by its over-expansion from medium-haul services focused on Algeria into long-haul destinations such as Brazil.
The French state, keen to drum up interest and save Aigle Azur’s 1,200 jobs, had also flagged potential bids from Air Caraibes parent Dubreuil Group and an investor group led by Lionel Guerin, former head of Air France’s Hop! unit.