Air France-KLM First Quarter Loss Widens

May 4, 2017

Air France-KLM reported an increased first quarter net loss of EUR€216 million, a 40 percent deterioration on last year.

The pre-tax loss was €229 million, down from a €204 million loss in 1Q16. Revenue rose 1.9 percent to €5.7 billion, and net costs rose 2.6 percent to €5.15 billion.

Air France-KLM said “The operating result was mainly driven by the good unit cost performance, amounting to a saving of €89 million compared to last year.” Unit costs fell 1.7 percent at constant currency rates in the quarter.

Fuel costs edged up slightly in euro terms, but were stable in US dollars.

Group unit revenue fell 1.4 percent, with passenger network unit revenue dipping 0.5 percent, low cost unit Transavia down 3.4 percent and cargo unit revenue falling 4.9 percent.

The Franco-Dutch group carried 20.9 million passengers in the quarter to end March, 5.2 percent up on the previous year quarter. Passenger traffic in revenue passenger km (RPK) terms was up 4.2 percent on an ASK capacity increase of 3.3 percent. The resulting load factor came in at 85.4 percent, a 0.7 percentage point increase on 1Q16.

The group said it had a “resilient trading start to 2017”, but there was a “high level of uncertainty regarding the geopolitical environment and the fuel price.”

It is targeting a 3 to 3.5 percent ASK capacity increase for 2017, “in order to regain the offensive in long-haul and to improve the performance in medium-haul,” the company said in a statement.

(Airwise)