Cost-cutting helps Air France-KLM back into the black

Cost-cutting helps Air France-KLM back into the black

Air France-KLM moved into the black at an operating level in the second quarter of the year with the help of cost-cutting but said tough measures are needed to deal with its medium-haul and cargo operations.

The European airline giant said operating profits came in at €79 million against a loss of €79 million in the same three months last year.

The quarterly net loss shrank to €163 million from €897 million in the same period a year before, when the carrier made a €368 million restructuring provision.

But Air France-KLM added that “a tough environment in Europe held back revenues” which rose by just 1.3% to €12.3 billion in the first half of the year.

Unit costs in the first six months dropped by 2.2% and net debt was cut by €600 million.

Chairman Alexandre de Juniac said the airline’s ‘Transform 2015’ turnaround plan was “fully on track, with cost reduction measures, the industrial plan and initiatives to win back our customers all underway within the planned timeframe”.

He added: “For the past year our results have improved quarter after quarter, in spite of the persistently tough economic environment.

“Nevertheless, revenues remain below target at this stage and the turnaround of the medium-haul and cargo businesses in particular is taking longer than expected.

“As a result, further measures will be adopted in both businesses in the fall to ensure that, on completion of our plan, we will have met our cost and debt reduction objectives, paving the way for a return to growth."

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