Air France-KLM reports huge Q2 loss, sees signs of recovery

Jul 29, 2021, 11:34 PM | Updated: Jul 30, 2021, 2:53 am

THE HAGUE, Netherlands (AP) — French-Dutch airline group Air France-KLM said Friday that the “first signs of recovery are visible” in bookings amid easing pandemic travel restrictions as it reported a second-quarter net loss of nearly 1.5 billion euros ($1.8 billion).

Air France-KLM’s fleet of planes carried just over 7 million passengers in the year’s second quarter, a rise of 477% compared to the same quarter last year, when strict lockdowns and travel restrictions slammed the brakes on the global aviation industry.

The quarterly earnings report is the latest sign of tentative recovery in one of the sectors hardest hit by the COVID-19 crisis. Earlier this week, European plane maker Airbus and its rival Boeing both posted second-quarter net profits.

Air France-KLM made a 7.1 billion-euro ($8.4 billion) loss in 2020 as the global pandemic grounded planes and halted travel plans worldwide, causing a 67% slump in passenger numbers.

But with many countries now easing restrictions amid vaccination campaigns, travelers are taking to the skies once more.

“There’s a big travel appetite; where people can travel, they will travel,” said CFO Steven Zaat. “But, of course, we are still far away from the 2019 levels.”

The carriers said that the easing of restrictions on Americans flying to Europe “also resulted in an improved booking trend.”

However, it didn’t give any guidance on expected capacity for the fourth quarter of 2021, citing “the uncertainty of the reopening of the North Atlantic for European citizens and uncertainty concerning travel restrictions waiving.”

CEO Benjamin Smith added: “Reciprocity of borders reopening and the acceleration of the vaccination rollout worldwide, especially in the context of the rise of the delta variant, will play a key role in maintaining this momentum.”

Revenue for the quarter was 2.75 billion euros ($3.26 billion), up by 132.5% compared to 2020’s second quarter.

Air France-KLM plunged to a 7.1 billion-euro loss (around $8.4 billion) in 2020 as the global pandemic triggered a 67% slump in passenger numbers at the group. The French and Dutch governments threw the carriers a lifeline of at least 9 billion euros ($10.6 billion) to ensure they survived the unprecedented downturn.

As part of cost-cutting efforts, the carriers have shed a total of 14,000 jobs amid the pandemic through voluntary departures and early retirement — 8,500 at Air France and 5,500 at KLM.

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Air France-KLM reports huge Q2 loss, sees signs of recovery