Air France-KLM posts £299m loss
Friday 04 May 2012
Air France-KLM posted a first-quarter net loss of 368 million euros
(£299 million) today, saying that high fuel costs and a continued drop
in cargo had cut into its profits.
The Franco-Dutch airline said revenue grew 6% to 5.6 billion euros (£4.55 billion), but that was not enough to offset the continued slide in the income column. The group made a net loss of 367 million euros (£298 million) in the first quarter of last year.
Despite what the company characterised as a "tough quarter", the results were better than the average consensus of analysts surveyed by FactSet, who had predicted 5.5 billion euros (£4.47 billion) in sales.
Uprisings in the Middle East and tension with Iran have pushed fuel prices up over the past year, and the company said today that its fuel bill rose 18% to 1.7 billion euros (£1.4 billion) in the January to March quarter. Only 1% of that rise was due to higher volumes.
Higher labour costs because of a 2011 salary increase also ate into profits.
The carrier is getting squeezed from both ends, as its costs rise and an important part of its revenue - cargo - drops. The global economic slowdown has weighed on international commerce, and the company said cargo traffic fell 6% in the first quarter.
The one bright spot was improving passenger traffic, which was up 5.5%. Revenue in that business rose 8.8%.
All airlines have struggled during the global recession, but Air France-KLM was also beset by high debt and operating costs. The company unveiled a turnaround plan last year to reduce costs by 10%, excluding fuel, and slash its debt. It is also negotiating new employee contracts.
The carrier said it expected its first-half operating result to be worse than the 548 million euros (£445 million) loss it recorded last year. But it said the its turnaround plan should begin bearing fruit in the second half.
- 1 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 2 Doctors remove 80 teeth from boy's jaw
- 3 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 4 Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations
- 5 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
Germany and ECB set for fight over money-printing
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
Syrian teenager Usaid Barho reveals how he escaped from Isis using a suicide vest
Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
Millions of Britons struggling to feed themselves and facing malnourishment
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Immigrants make UK racist, says Ukip councillor Trevor Shonk
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...