Air France KLM reports reduced but heavy third-quarter loss

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Air France KLM reports reduced but heavy third-quarter loss

Unread post by bimjim » Thu Feb 11, 2010

http://www.atwonline.com/news/story.html?storyID=19364

Air France KLM reports reduced but heavy third-quarter loss
Thursday February 11, 2010

Air France KLM Group reported a net loss of €295 million ($404.6 million) for its fiscal third quarter ended Dec. 31, 2009, a 41.9% improvement compared to a loss of €508 million in the year-ago period when results were impacted severely by fuel hedge losses.

Operating loss of €245 was similar to last year's deficit of €243 million despite a 16% drop in revenue to €5.2 billion. Although the passenger airline division's operating loss widened to €184 million from €129 million in the year-ago quarter, this was offset partially by a stronger performance by the cargo division, which saw its operating loss reduced to €29 million from €83 million in the year-earlier period. The maintenance division posted a €12 million operating profit, down 7.7%.

The group's third-quarter passenger revenue fell 14.5% year-over-year to €4.03 billion on a 4.7% reduction in capacity to 61.4 billion ASKs. Traffic declined 4% to 49.2 billion RPKs and load factor inched up 0.6 point to 80.2%. Cost per ASK sank 8.9% to 6.48 eurocents but RASK declined 10.5% to 8.9 eurocents and yield decreased 11.2% to 7.8 eurocents. The group said the decline in unit revenue showed a notable slowdown "for the first time since the beginning of the current financial year, particularly in premium long-haul," although RASK remained well below the year-ago levels.

AF KLM's cargo business experienced "healthier volumes and a marked improvement in unit revenues" that led to a halving of the drop in cargo revenue recorded in fiscal year's first two quarters. Third-quarter revenue still declined 26.8% to €650 million.

For the nine months ended Dec. 31, net loss widened to €868 million from €332 million in the year-ago period owing to a €464 million impact from its fuel hedges as well as an 18.6% plunge in revenue to €15.97 billion. Operating loss of €788 million compared to a €349 million profit the prior year. The company said it realized €529 million in savings under its Challenge 12 program.

AF KLM said its fiscal fourth-quarter operating loss should be similar to last year's €535 million pro forma deficit. It expects a return to breakeven operating results in FY11.

by Cathy Buyck

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