Air France-KLM Makes Losses

Air France and KLM tied the knot in May 2004

Air France-KLM has announced that revenue in the passenger business in the first quarter were down by 18.7 percent and in cargo by 41.5 percent, leading to a drop of 20.5 percent in total group revenue to 5.17 billion Euros.

Moreover, the airline said that the results of the period under review were affected by a negative fuel hedging impact to 252 million Euros.

Despite the difficult environment, the group benefited from a high level of liquidity of 5.7 billion Euros including1.2 billion Euros in credit facilities.

During the quarter, Air France-KLM stated that it had successfully secured a 661 million Euros convertible bond issue, while on 28th July, 2009, it extended the term of its 530 million Euros credit facility from July, 2010 to July, 2012, with the possibility of a further extension to July 2013.

The airline however confirmed that their results did not include its 25 percent holding in Alitalia, which will be integrated by the equity method as of the second quarter of the year on the basis of the previous quarter's results.

Specifically, Air France-KLM revealed that passenger activity from April to June, 2009, remained weak, with a 5.8 percent decline in traffic, while a   4.7 reduction in capacity limited the decline in the load factor to 0.9 points at 79.4 percent.

As in previous months, it stated that the decline in premium class unit revenue was particularly pronounced, while they proved more resilient in the economy class.

In total, unit revenue per available seat kilometers fell by14.8 per cent; with revenue from the passenger division also falling by 18.7 percent to 4.01 billion Euros.

Despite a reduction in capacity of 17.2 percent, the carrier mentioned that the cargo division of it operations suffered a sharp decline in traffic of 22.7 percent, and a drop in unit revenue per transported kilometre of 25 percent; with revenue for the period declining by 41.5 percent to 547 million euros.

The Group also stated that its operating costs declined by 10.1 percent to 5.66 billion Euros, adding that it dropped by 6.4 percent excluding fuel.

The fuel bill, it said, declined by 329 million Euros to 1.14 billion (-22.5 percent) under the combined effect of a 10 percent decline in volume that was a negative currency impact of 15 percent, with the drop in fuel prices limiting to 27 percent by the hedging effect, while employee costs were also down by 1.3 percent to 1.9 billion Euros.