This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.
Welcome to Reed Smith's viewpoints — timely commentary from our lawyers on topics relevant to your business and wider industry. Browse to see the latest news and subscribe to receive updates on topics that matter to you, directly to your mailbox.
| less than a minute read

Airline bailouts: Tugging at the green strings

Airline bailouts are back in the news this week, as Greenpeace seeks to have stricter ‘green strings’ attached to the bailout agreed for KLM.

As we noted in our earlier article on this subject, ‘green strings’ are bailout conditions relating to climate change goals, requiring the recipient of the funding to operate in a certain way (such as limiting flights covering routes already well served by rail links), observe certain targets or restrictions (such as using prescribed percentages of sustainable aviation fuel or making identified emissions reductions), and achieve certain goals (such as upgrading a fleet to include more efficient equipment).

Research has shown that attaching performance conditions to bailout packages can increase their effectiveness, but as airlines continue to negotiate an extraordinarily challenging and uncertain operating environment, any such conditions will need to strike the elusive balance between green goals and survival – so watch this space.

 You can read our article in full here.

The bailout terms include new environmental and noise pollution targets for KLM which were insisted upon by the Dutch parliament, as well as cost cuts. However, Greenpeace said the environmental conditions do not go far enough.