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Air France-KLM half-year losses near €3bn

Air France-KLM reported a loss of almost €1.5 billion for the three months to June taking its half year losses close to €3 billion.

The Air France-KLM group recorded an operating loss of €752 million for the quarter to June and €1.9 billion for the first six months of the year.

The quarterly operating loss was an €801 million improvement on the previous year but still took the net loss to €1,489 million for the three months and €1,931 for the half year.

Air France-KLM reported net debt of €8.3 billion at the end of June, down €2.7 billion on the end of 2020, and available liquidity of €9.4 billion.

The group described the level of cash available as “comfortable, given the first signs of recovery and the cash requirements for 2021”.

It forecast the third-quarter operating result would be “positive”.

A results statement noted: “Since June, the first signs of recovery are visible in the booking trend thanks to waived or eased travel restrictions in Europe due to the rise of vaccination rate across all countries.

“The reopening of the North Atlantic for American citizens to visit Europe also resulted in an improved booking trend.”

Air France-KLM expects to operate 60%-70% of 2019 capacity in the three months to September.

It would give no guidance on capacity for the final quarter of the year “due to the uncertainty of the reopening of the North Atlantic for European citizens and uncertainty concerning travel restrictions waiving”.

Capacity in April-June quarter was 300% up on last year but remained just half (48%) of the 2019 level.

Group chief executive Ben Smith said: “The second quarter of 2021 saw the first signs of the long-awaited recovery. Travelers were able to take the skies again.

“Reciprocity of borders reopening and acceleration of the vaccination roll-out worldwide will play a key role in maintaining this momentum.”

The group will operate 7% fewer aircraft in 2022 than in 2019 and expects capacity to return to 2019 levels only in 2024.

By the end of June, KLM had cut its workforce by 5,700 since the end of 2019. Air France had reduced its number of full-time-equivalent workforce by 5,300 and reported an additional 3,200 would leave by the end of 2022.

Ongoing cuts in operating costs would mean savings of €800 million a year at KLM by the end of 2021 and €1.3 billion at Air France by the close of 2022.

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