Air France-KLM sinks to another billion-dollar loss

Air France passenger traffic climbed in H1 2012
Air France passenger traffic climbed in H1 2012

Air France-KLM improved its financial performance in the first half of 2013, but still recorded a heavy loss of more than a billion dollars.

The European airline group registered a net loss of EUR793 million (US$1.05 billion) in the January-June 2013 period – 37.2% better than the EUR1.26bn loss it experienced in the first half of 2012.

Company revenues increased 1.3% to EUR12.3bn, following a 2.0% rise in passenger traffic, while fuel (-7.7%) and staff costs (-0.6%) both fell. But high maintenance costs and a weak cargo sector dragged down the results. The company’s operating loss for the six-month period stood at EUR451m, down from EUR690m in the same period last year.

Air France-KLM’s chairman, Alexandre de Juniac, said that while the company was making progress with its ‘Transform 2015’ restructuring plan, further cost-cutting measures are now necessary.

“For the past year our results have improved quarter after quarter, in spite of the persistently tough economic environment. Nevertheless, revenues remain below our target,” said de Juniac. “As a result, further measures will be adopted in both business (passenger and cargo) in the fall to ensure that, on completion of our plan, we will have met our cost and debt reduction objectives, paving the way for a return to growth.”

These measures will include “voluntary departure plans together with industrial and commercial decisions”, the airline said.
Air France-KLM predicted a further improvement in its second half results, but this is unlikely to be sufficient to return the airline to a full-year profit.

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