Air France-KLM shares fell more than 10 percent on Wednesday after the European airline group announced the sale of bonds convertible into new shares worth 300 million euros to pay back state aid and boost capital.
Air France-KLM made huge losses in 2020 and 2021 after the coronavirus pandemic slashed passenger numbers to around a third of normal levels. The consortium has made a profit so far this year.
The French and Dutch governments provided 10 billion euros in loans to Air France-KLM to help the airline as planes were grounded during the epidemic. The bond sale is to raise funds to pay back those loans.
Stocks fell by around 11.5 percent after 1100 GMT after the debt issue.
The airline also faces the threat of strikes in France during the busy Christmas period after two unions representing employees issued a warning of industrial action between 22 December 22 and 2 January.
Negotiations on a collective agreement for cabin crew are in progress.
The company said the money raised from the debt issue would be "fully" allocated to paying back the French state.
The French and Dutch governments, whose stakes are 28.6 percent and 9.3 percent respectively, said they would not participate in the rights issue.
Read more on RFI English
Air France cancels more than half of flights as controllers strike
Chaotic summer for post-pandemic air travellers in Europe
Air France-KLM reports signs of recovery despite massive Q2 loss