Air France-KLM hit hard by the crisis

The European largest airline has announced a 426 million Euros net losses in the first Quater, compared to a 217 million net profit posted in the same period last year. Negative fuel hedging has made the results worse. Load factor dropped by 0,9 points from  80,2 to 79,4 per cent which is relativelly stable. ASK and RPK fell respectivelly 4,7 and 5,8 per cent. Yield was down 11 per cent in comparison to the last quater of 2008. The yield problem has even worsened during the second quater this year as it fell 16,3 compared to the first quater. Premium passengers traffic drop is the main factor in yield contraction. During the second quater this year, Unit seat revenue for business passengers fell 18,2 per cent /Q4 2008, and -27,1 per cent / Q1 2009.

The airline has cut capacity in all major routes to adjust to demand. Africa and middle east were the only markets where capacity increased (3,6 per cent). The fall in unit revenue was also limited, due to low competition in africa, and passenger market structure.

Air france is pursuing its costs containing policy, and is now trying to rationalize its routes structure, notably in Latin America, and reduce frequencies while maintaining the same number of seats offered, by operating high capcity aircraft. The company is also retructuring its medium haul network to better compete with low cost airlines.

Source: Air France-KLM