Air France-KLM has posted a EUR1.26 billion net loss for the first half of 2012, as rising costs as a struggling cargo sector heaped further problems on the Franco-Dutch airline.
The company, which posted a EUR809m full-year net loss in 2011 and a EUR483m deficit in the first quarter of 2012, plunged deeper into the red in the April-June 2012 quarter with a EUR895m net loss.
Air France-KLM’s revenues actually increased 5.2% year-on-year to EUR12.15bn in the first six months of the year following a 3.9% increase in passenger traffic and a 2.4-point gain in cabin load factors, which averaged a healthy 82.2%. Cargo traffic however, fell sharply (-6.5%) and the cost of aircraft fuel jumped 15.1% to EUR3.57bn – 44.5% of the group’s total operating expenses.
The group’s chairman, Jean-Cyril Spinetta said the poor result was in line with expectations.
“As we indicated on the occasion of the first quarter results, the results for the first half represent a deterioration relative to the already-significant losses recorded a year earlier. Even though these second quarter results represent a year-on-year improvement, they remain in negative territory,” he said.
Air France-KLM is currently undertaking a major turnaround plan, ‘Transform 2015′, intended to return the group to profitability in three years’ time through a series of measures, including the cutting of more than 5,000 jobs.
“These results demonstrate how crucial the success of the Transform 2015 plan is to the turnaround of the group. In an increasingly uncertain global economic environment compounded by oil price and exchange rate volatility, an improvement in our productivity and costs is even more necessary. Along with the board, I am pleased that the majority of the group’s employees are understanding and supportive of this demanding recovery plan. This demonstrates their spirit of responsibility and commitment to both Air France and KLM,” Spinetta added.
