KLM Reduces Earnings Outlook

Overall: In December, overall traffic increased by 6 percent, whereas capacity increased by 7 percent year-on-year. As a result overall load factor decreased by 0.5 percentage points to 74.6 percent. 

Passenger Traffic: December passenger traffic increased by 11 percent year-on-year. As capacity was up 10 percent, passenger load factor increased to 74.6 percent, up 1 percentage point year-on-year. Compared to December 2000, passenger traffic increased by 1 percent.

On the North Atlantic, passenger traffic increased by 24 percent year-on-year. A capacity increase of
21 percent, which is partly the result of shifting back capacity restoring the balance in the joint venture with Northwest, resulted in a load factor increase of 1.7 percentage points to 78.6 percent. On the Asia Pacific routes, traffic increased by 8 percent year-on-year. As capacity increased by 5 percent, load factor increased by 2.1 percentage points to 74.2 percent.

Cargo Traffic: In December, cargo traffic was at the same level as last year. As capacity was 3 percent higher year-on-year, cargo load factor decreased to 68.9 percent, down 2.4 percentage points on last year. Compared to December 2000, cargo traffic decreased by 5 percent.

Traffic on the Asia Pacific routes was at the same level as last year, whereas traffic on the North Atlantic was 4 percent lower.


Revised outlook for Fiscal 2002/03: During the quarter ending in December, the industry has experienced adverse changes in the operating environment. The impact of deteriorating economic conditions as well as the geo-political instability in certain regions in the world, which also had its effect on oil prices, resulted in lower than expected traffic volumes and yields for the KLM Group during the third quarter of its fiscal year 2002/03. 

As the operating environment in the fourth quarter of the current fiscal year (January through March 2003) will remain difficult, it is unlikely that a positive operating income (excluding any effects of the Alitalia arbitration award) for the fiscal year ending March 31, 2003 will be achievable. 

Given these developments, the KLM Group has been reviewing its capacity and route network, in addition to other actions. As a first step, KLM decided in December to discontinue its Aberdeen - Stavanger service. KLM has also announced that it will temporarily suspend services to and from Abidjan, Ivory Coast as of February 3, 2002. 

KLM Group will publish its Third Quarter Results on January 23, 2002, 08.00 hours CET (07.00 hours GMT).