PARIS, May 7 — Air France-KLM today posted sharp first-quarter losses and warned of more woe to come as the coronavirus pandemic trampled on global travel plans.
The group said it did not expect to reach pre-crisis levels of passenger demand “before several years” and chief executive Benjamin Smith was quoted in a statement as saying it was working on “a renewal plan” that was likely to include staff reductions.
French deputy transport minister Jean-Baptiste Djebbari told France 2 television that Smith had hinted at “more voluntary departures than direct job cuts” at the airline, where 18,800 workers of a total 53,000 are over the age of 50.
By comparison, British Airways has announced plans to shed 12,000 jobs and United Airlines is looking to eliminate 3,450.
Meanwhile, Air France-KLM said it had suffered a net loss of €1.8 billion (US$1.94 billion) in the first three months of the year, more than five times its €324-million loss in the first quarter of 2019.
The group highlighted €455 million in “over hedged” fuel purchases that were never used because of the pandemic.
Its first-quarter result underscored the effect of the virus crisis in March.
Th group noted “a strong performance at the start of the year with passenger unit revenue up 0.8 per cent” at the end of February.
“March 2020 however was strongly impacted by the expansion of the virus and consequential globally imposed travel restrictions to counter the spread of the Covid-19 virus.”
The group, which is to benefit from seven billion euros in French state aid along with an expected two to four billion euros in aid from the Dutch government, said that 10.5 per cent of its capacity had been suspended in the quarter.
Looking ahead, capacity was forecast to be 95 per cent lower in the second quarter than in the same period a year earlier, before easing back slightly to a still hefty 80 per cent drop in the third.
The group predicted “a progressive lifting of border restrictions in 2020, enabling a slow capacity resumption” in the summer, but also “a prolonged negative impact on passenger demand, not expected to recover to pre-crisis levels before several years.” — AFP
