The European Commission (EC) has approved a €7bn French guarantee and shareholder loan to Air France as the coronavirus (Covid-19) pandemic severely affects airlines’ operations.

Falling under EU State aid rules, the loan is to provide liquidity support to the company.

Last month, Franco-Dutch airline holding company Air France-KLM and Air France secured the funding and was due to be approved by the commission.

The approval is based on the State Aid Temporary Framework adopted by the EC on 19 March and amended on 3 April.

It is also directly based on Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU).

EC executive vice-president, in charge of competition policy, Margrethe Vestager said: “The aviation industry is important in terms of jobs and connectivity. In the context of the coronavirus outbreak, Air France has also been playing an essential role in the repatriation of citizens and for the transport of medical equipment.

“We have cooperated closely with France, as with many other member states, to ensure that public support to tackle the current crisis can be put in place as quickly and effectively as possible, in line with EU rules.

“France has also announced plans for certain green policy choices as regards Air France. Good. Member states are free to design measures in line with their policy objectives and EU rules.”