Europe’s largest carrier Air France-KLM has just announced that a drop in demand by passengers has caused it to publish greater losses for the second quarter than were previously expected. The lack of customers combined with the continued impact on its finances by fuel hedges means that the airline has announced a loss of €147 million for the three months up to September 30th this year. Last year the airline announced profits of €27 million for the same quarter.
Analysts say the Air France-KLM usually show their best figures in the second quarter due to the high season holiday period. The airline has been desperately trying to cut capacity in order to keep its aircraft full and has reduced its workforce by implementing measures such as voluntary redundancy programmes which will see another 1,700 jobs disappear throughout next year. Air France-KLM has managed to improve its load factor by cutting capacity on its aircraft by 4.4 percent. This has meant that even though traffic dropped 3.3 percent passenger loads were up from 83.1 percent to 84 percent for the period.
Air France-KLM is suffering along with the other premium service airlines from a drop in those flying in its business and first class cabins. It has left it vulnerable to the spread of budget airlines such as easyJet and Ryanair. The airline has also been hit very hard by the drop in cargo traffic.
Air France-KLM are trying to remain positive and say that they hope to announce that they are at a position of breaking even by the beginning of the next financial year.
