Air France-KLM will carefully grow this year after last Winter’s additional capacity hurt unit revenues in Q1. The Franco-Dutch airline group plans to add capacity by on average 2-3 percent, slowing down growth on routes to the Middle East, Asia, and North America. Low-cost subsidiary Transavia/ is allowed to grow at 9 percent.

Air France-KLM released its Q1 results on May 3, confirming the trend at many airlines of a weak quarter under pressure due to rising costs and a late Easter. Net operating result for the Group is EUR -303mln, down from -118mln the previous year.

Air France net result is EUR -256mln, down from -178mln last year when a strike impacted performance. KLM’s net result dropped to EUR -56mln from +52mln, reflecting a weak Q1 affected by weather and other operational issues.

As seen with most airlines, Group revenues were up: 3.1 percent to EUR 5.986bln. Air France grew +4.1 percent to EUR 3.698bln, with KLM lagging behind at -0.1 percent to EUR 2.385bln.
The two network airlines grew capacity (ASK) by 3.1 percent to 69.759mln, but traffic (RPK) only grew by 1.9 percent to 60.221mln. As a result, load factor dropped by 0.4 percentage points to 86.3 and unit revenues by 0.9 percent or -1.6 percent at constant currency to EUR 6.34.

The strongest growth was on the Caribbean and Indian Ocean network followed by Asia, while overcapacity and a weak economy in South America and competitive pricing to North America impacted unit revenues. Like Lufthansa, Air France-KLM a weaker European market with overcapacity.
witnessed the global slowdown of the economy, with revenues flat compared to last year. Here too adding extra capacity resulted in lower unit revenues, down 2 percent over last year.
Fuel costs were up 13.2 percent. In order to tame costs, Air France is to introduce a program to reduce staff by some 400 on a voluntary basis.
Group debt was lowered by EUR 403mln to 5.8bln.

LCC Transavia reported a net result of EUR -71mln, down from -58mln last year. Passenger numbers were up 7.8 percent, but at 11.4 percent capacity grow faster. Yet, traffic (RPK) grew by 11.7 percent.

Based on promising forward bookings on long-haul, Air France-KLM is positive it can compensate the lower results expected on its short-haul network and still improve on unit revenues and costs at constant currency and fuel. The fuel bill is expected to be some EUR 650mln higher.

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