Air France cost-cutting helps reduce loss
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Air France-KLM achieved an improved financial result in 2013, as the airline’s restructuring strategy started delivering cost-savings.
The European airline group achieved a 3.8% reduction in unit costs in the 12-month period, while revenues increased 2.3%. This allowed Air France-KLM to slash its full-year net loss by 70% to EUR349 million (US$479m).
The group was able to reduce its net debt by more than EUR618m, to EUR5.3bn, and it improved its full-year operating result to a profit of EUR130m. And Air France-KLM’s chairman, Alexandre de Juniac, said these achievements marked “an important stage on the group’s turnaround”.
“We are clearly benefiting from the successful implementation of new working conditions and of the industrial plans adopted in all our businesses. As a result, we returned to a positive operating result despite the persistently challenging environment, generated robust free cash flow and reduced debt beyond initial targets,” de Juniac said.
Helped by the reduction of more than 7,000 jobs and a revision of capacity across its network, Air France-KLM achieved a 1.4% reduction in operating costs last year, including a 5.2% drop in fuel costs and a 2.4% fall labour expenses.
Despite these improvements however, Air France-KLM still slumped to a third consecutive full-year net loss. The 2013 loss of EUR349m compounds the EUR809m and EUR1.19bn net losses suffered in 2011 and 2012 respectively.
For 2014, Air France-KLM said it is planning to increase its EBITDA (earnings before interest, tax, depreciation and amortisation) by 35% to EUR2.5 billion and continue to reduce its debt towards the long-term target of EUR4.5bn.
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