Falling business traffic hits full-year results
Air France KLM has blamed a €814m net loss last year on a fall in business traffic and fuel hedging costs.
The airline group reported a net income of €756m the previous year, before the full effects of the global economic downturn and fluctuating oil prices had set in.
AF KLM’s ceo Pierre-Henri Gourgeon said: “The financial year 2008-09 was one of contrasting halves, with a resilient performance in the first half, wiped out by the full force of the economic crisis in the second.
“Business traffic and cargo were especially affected, leading to a decline in revenues which accelerated in the fourth quarter.
AF KLM reported a €574m operating loss in the fourth quarter due in part to a €243m “negative effect” from fuel hedging.
“The sharp decline in oil prices had a negative impact on the fuel bill in the second half, whereas our hedging policy had been efficient in the first half,” Mr Gourgeon added.
In March, AF KLM predicted a full-year operating loss of around €200m after it abandoned hopes of turning a profit. Exceeding expectations, the group reported a loss of just €129m.
Mr Gourgeon said: “In the face of these unprecedented conditions we moved rapidly to lower capacity, reinforce cost-saving measures, reduce our investments and unwind part of our fuel hedges”.
AF KLM announced it was to shed between 2,500-3,000 jobs by 2011 after it lowered its forecast for this year.
AF KLM has already cut 2,400 jobs in the past year from its 63,500 workforce. Mr Gourgeon added that the next year was likely to be “equally challenging.”
He said: “Visibility remains low, even though we have seen some signs of stabilisation in recent weeks. We will therefore continue our strategy of adapting capacity and costs.
AF KLM and Delta Air Lines today (May 20) signed a long term deal in Paris to operate flights around the world (see ABTN news: AF KLM and Delta sign joint venture).
Mr Gourgeon said AF KLM would seek to reinforce its partnerships with both Delta Air Lines and Italian airline Alitalia.