Air France-KLM, Air France and Societe Generale announce the first Sustainability Linked Senior Secured Term Loan transaction ever closed for an airline
Air France-KLM, Air France and Societe Generale announce the financing of an Air France Airbus A350-900 aircraft under a Balthazar-backed Sustainability-Linked Senior Secured Loan.
Societe Generale acted as Sole Arranger, Sustainability Structurer, Lender and Agent in this landmark transaction, supporting Air France’s fleet renewal efforts, which are central to the airline’s sustainability trajectory.
On December 3rd 2021, Air France took delivery of its twelfth Airbus A350-900, a latest-generation aircraft offering outstanding environmental performances.
The financing of this Air France aircraft has been arranged and provided by Societe Generale in the form of a sustainability-linked debt facility. The financing transaction is the first sustainability-linked aircraft-secured term loan provided to an airline.
Aircraft financing conditions are linked to the achievement by Air France of Sustainability Performance Targets (SPTs) in respect of sustainability-linked key performance indicators. The SPTs selected for the transaction are focusing on the proportion of new-generation and fuel-efficient aircraft in Air France’s fleet and the future usage of Sustainable Aviation Fuel (SAF) as part of Air France’s daily operations.
The transaction is supported by a Balthazar non-payment insurance policy provided by a consortium of leading private insurance companies through insurance broker Marsh France.
By arranging this landmark aircraft financing transaction, Societe Generale supports Air France’s fleet renewal efforts, which are central to the airline’s sustainability trajectory.
By 2050, Air France and Air France-KLM aim to reach net zero emissions by using all levers, notably fleet renewal with the introduction of Airbus A220s and A350s at Air France, respectively offering a 20 and 25% reduction in CO2 emissions compared to previous generation aircraft, and the use of Sustainable Aviation Fuels (SAF), which have the potential to reduce CO2 emissions by up to 80% over the entire life cycle.
Air France-KLM’s ambitious environmental framework and targets have been recognized by the recent ESG Evaluation performed by S&P, rating Air France-KLM as leader within the airline industry, and supporting the Group’s overall strategy.