Economy

Air France KLM still heavily burdened by pandemic: loss of € 1.5 billion | Financial

The loss was less than the 1.8 billion euros after the first three months of 2020. At the time, the company also incurred costs for unfavorable fuel deals, deferred tax assets and write-offs for earlier phasing out of the iconic Boeing 747s.

CEO Benjamin Smith emphasized that Air France KLM continues to suffer from the restrictions worldwide. Even so, according to him, it was possible to keep costs ‘under control’. Thanks to the additional support for Air France of in total 3 billion euros, which was recently agreed upon, the company will manage to get through the summer months anyway. KLM has not yet applied for additional support. Last year, the Netherlands and France already guaranteed EUR 10.4 billion in loans and guarantees.

Substantial drop in passengers

Smith expressed the hope that vaccination programs and the introduction of travel passes will quickly reopen borders and get air traffic back on track. 4.8 million passengers were transported in the first quarter. That was three quarters less than the same period a year earlier. To keep costs down, society said goodbye to thousands of employees. Smith emphasizes that Air France KLM will continue to pay close attention to costs in the coming months.

“Disguised Profit Warning”

This is what DFT reporter Yteke de Jong thinks:

“Air France KLM comes with a covert profit warning. This year there is less flying than first thought, which means that the airline will have to hang on the state infusion even longer. The long lockdowns and new travel restrictions from governments have hit Air France KLM hard again. In order to be ready for the future after corona, Air France KLM is still counting on voluntary departure for the time being, which means that major cuts in costs are not yet expected as long as the authorities step in to reimburse part of the wage costs. ”

follow Yteke de Jong via Twitter.

Air France KLM closed the quarter with a turnover of 2.2 billion euros. That meant a decrease of 57 percent on an annual basis. The operating result was 1.2 billion euros negative. Of that, 840 million euros was from Air France. KLM achieved a negative result of EUR 337 million. The debt of the aviation combination increased by 1.5 billion euros to 12.5 billion euros. In the first quarter, Air France-KLM paid out 550 million euros in refunds to customers. Since the beginning of the crisis, 2.8 billion euros has already been repaid to customers.

The outlook for the group for the current quarter is not yet encouraging. The company points out that a stricter corona regime applies in France at least until the beginning of May. Travel restrictions also apply worldwide. Travelers also wait until the last minute to book a trip.

For the current quarter, Air France KLM expects to be able to execute 50 percent of the ‘normal’ flight schedule before the crisis. In the third quarter, with the holiday months of July and August, the group expects to fly 55 to 65 percent of the capacity. That used to be 70 percent.

The cargo division of Air France KLM performed well. Due to strong demand and less capacity, especially because passenger aircraft flew less and could not carry cargo, the capacity utilization improved. The company also benefited from higher freight rates.

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