Turbulence in the skies of Air France with losses of 5 million euros per day in the first quarter

Traditionally, the aviation sector does not celebrate the start of the year and then recover. Following the Lufthansa group, whose loss tripled in the first quarter, Air France also just posted an operating loss that exceeded expectations despite rising turnover.

While Air France-KLM increased its capacity (+4.5%), number of passengers (+6%) and turnover (+5%) to €6.65 billion, the Franco-Dutch group posted an operating loss of €489 million . two-thirds higher than last year for the same period. As a result, his result is -480 million euros.

“Despite a difficult start to the year, marked by ongoing geopolitical tensions, Air France-KLM recorded a further increase in its turnover in the quarter, supported by structurally strong travel demand. However, as expected, our operating profit was impacted by costs associated with disruptions and slowdowns in cargo volumes,” explained Benjamin Smith, CEO of Air France-KLM, in a press release.

Air France-KLM explained that in the first quarter it suffered from “operational disruptions” related in particular to shortages of spare parts in the sector, as well as exceptional bonuses for KLM employees, which led to an increase in unit costs. . 4%. Additionally, ongoing Covid loan repayments and rising Brent prices will continue to weigh on cash flow for several months to come.

However, according to Ben Smith, “we nonetheless remain confident in our ability to achieve our 2024 unit cost targets.”. And there are very positive signs in this area. The group notes “promising ticket sales for the summer season”, particularly thanks to the Olympic Games. .

Air France-KLM also announced “transformation acceleration initiatives” that are in addition to 700 measures already being implemented to rationalize costs and improve synergies within the group. This will probably lead to a revision of growth forecasts (still projected at 5% for 2024), but also a hiring freeze for administrative and non-operational staff.