Air France improves, but still falls to H1 loss
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Air France-KLM’s financial performance improved in the second quarter of 2014, but could not prevent the company from slumping to a large first half loss.
The European airline group suffered a net loss of EUR614 million (US$824m) in the first six months of the year. This marked an improvement of EUR185m compared to the same period in 2013, but continues the trend of poor financial results experienced by the group in recent years. Air France-KLM posted a full-year net loss of EUR349m in 2013, EUR1.19bn in 2012 and EUR809m in 2011.
But the airline’s ‘Transform 2015’ restructuring and debt-reduction plan appears to making progress. In the second quarter of the year, unit costs were reduced 4.0% and revenues climbed 1.7%. This allowed operating profits to more than double to EUR238m.
And in the first half of 2014, the company’s operating losses were slashed from EUR448m to EUR207m.
“Despite a tough operating environment, the Air France-KLM Group maintained the momentum of recovery in the first half of 2014, by halving its operating loss,” said group chairman Alexandre de Juniac. “Quarter after quarter, our results are consistently reflecting the benefits of the productivity measures implemented under Transform 2015.”
In terms of operations, Air France-KLM’s traffic, measured in revenue passenger kilometres (RPK), increased 2.5% in the first half of the year. This outpaced a 1.2% rise in seat capacity, allowing average cabin load factors to rise to 83.8%. Looking forward however, the company said the operating environment “remains tough”, with overcapacity on routes to North America and Asia impacting yields.
Through its Transform 2015 plan, Air France-KLM is aiming to achieve pre-tax profits of EUR2.2-2.3bn in 2014, and cut its net debt to EUR4.5bn in 2015.
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