Air France KLM report 147 million euro loss

For the first time since May 1996, the Air-France-KLM group, in its second quarter, posted a loss of over 147 million Euros.

The quarter ending on September 30th reported a net loss of 147 million euro or fifty cents a share. The figures at the end of last year was reported to be a profit of 27 million euro or nine cents a share. Thus the net loss totaled to a loss of 130 million euro.

The airline has continued its struggle against the downturn, which has included significantly lesser demand for air travel, falling ticket prices and cargo handling.

Fuel hedges cost a reported 179 million euro. Revenue is said to have plummeted by 19 percent to 5.6 billion euro. Passenger capacity was decreased by 4.4 percent. The airline however, improved its load factor, as the traffic did not fall too steeply. Only a 3.3 percent frop was recorded, which helped the airline amend its load factor from 83.1 percent to 84 percent.

In order to break even, the company is considering cutting around 1500 jobs held by staff. The proposed plan is to have a voluntary redundancy programme, where volunteers can retire with added benefits. Also, cargo capabilities are to be cut down by 15 percent and seating capacity will be trimmed by five percent.

The airline’s high exposure to cargo traffic has unfortunately left it more vulnerable than its counterparts. After a 17.9 percent cut in its cargo carriage, the airline reported a loss of 16.8 percent in cargo traffic. However, despite a 4.3 percent cut in capacity, the airline reduced the staff salaries by only 1.3percent.