Air France-KLM warns recovery may takes years as losses mount
Air France-KLM has reported a first quarter operating loss of €815 million as the coronavirus pandemic begins to show up in financial results.
Though only the last two weeks of the three-month period were impacted, the carrier reported substantial losses.
In the month of March there was an “abrupt plunge in revenue that will obviously extend through the second quarter,” warned chief financial officer Frederic Gagey.
Capacity is currently down by 95 per cent at the airline, with Air France-KLM revealing it could still be down by as much 80 per cent moving into the third quarter.
The multi-national carrier recently secured €7 billion in support from the French government, while Dutch authorities have pledged a further €2-4 billion.
Air France-KLM added it expects monthly cash burn to fall by €400 million in the second quarter thanks to cost-cutting and state-funded furloughs that save €350 million a month.
Formally withdrawing its pre-crisis 2020 guidance, the carrier said it now planned to reduce its aircraft fleet by 20 per cent in 2021.
Chief executive, Ben Smith, will present an updated “transformation plan” to investors within months, he said.
However, demand is expected to take “several years” to recover.
Air France-KLM report revenue fell 15.5 per cent to €5.02 billion in the first quarter.