Air France-KLM posts US$783 million quarterly operating loss, down 82pc
2012 05 07
- Details
AIR France-KLM recently announced an operating loss of EUR597 million (US$783 million) for the first quarter of 2012, down 82 per cent year on year, drawn on a six per cent increase in revenue of EUR5.6 billion.
The airline described the first quarter as "tough" in its statement due to tremendous increases in fuel and employee costs as well as the slowdown in airfreight activities.
During the first quarter, cargo traffic declined 6.1 per cent, capacity reduced two per cent and load factor dropped 2.9 points to 64.9 per cent. Revenues on cargo shipment shrank 3.3 per cent year on year to EUR744 million and the operating result was a negative EUR68 million.
Operating costs rose nine per cent and by six per cent without fuel expenditures. The fuel cost increased 17.9 per cent by EUR255 million to EUR1.68 billion. Also, increase in salary and rise in pension costs push employee costs up six per cent to EUR1.91 billion. This attributed to a negative EUR597 million in operating result.
Looking ahead, the airline reaffirms cost-cutting position. It expects the annual fuel bill to increase EUR1.1 billion and the first half results will be "below the level of last year." But it hopes the results will improve in second half due to the gains from its "Transformation 2015" programme, which has been implemented to drive the company to achieving sustainable growth through measures to reduce controllable costs by 20 per cent to restore an industry average, to refocus on customer service and to simplify the entire organisational structure.
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