Air France KLM makes profit despite uncertainty

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Air France KLM made a profit of 118 million euros ($131.5 million) in 2015 despite continuing weakness in its cargo division.

The 2015 profit is up on the 2014 loss of 225 million euros. In the fourth quarter, Air France KLM saw profit fall from 308 million euros in 2014 to 276 million euros. Revenue for the year was up 4.6 per cent to 26 billion euros, and in the fourth quarter it increased by 2.2 per cent to 6.4 billion euros, though it was negatively impacted by an estimated by 120 million by the Paris terrorist attacks in November. The group reduced its debt 1.1 billion euros to 4.3 billion euros.

The cargo division, Air France KLM Martinair Cargo saw volumes fall by 7.5 per cent in 2015 to 1.2 million tonnes and it made an operating loss of 245 million euros compared to 212 million euros in 2014. The cargo load factor fell by 2.6 percentage points to 60.4 per cent. In the fourth quarter, losses reduced to 23 million euros, though volumes were down 7.7 per cent to 309,000 tonnes. The fourth quarter load factor fell by 1.3 percentage points to 63.3 per cent.

Air France KLM chairman and chief executive officer, Alexandre de Juniac says: “The measures deployed with Transform 2015 have paid off and we are delivering the strategy implemented in the Perform 2020 plan, with focused growth in long haul, E&M and the European low-cost operations while restructuring loss-making businesses and reducing unit costs.”

He says though the business environment has improved, helped by lower fuel prices, Air France KLM will continue to try and improve its competitiveness. The airline group says uncertainty about fuel prices and revenue continue due to geopolitical problems and there is still overcapacity.

As part of its Perform 2020 restructuring plan, the group phased out five freighters from its fleet and it will be operating five by June. Losses for freighter activities were reduced to 42 million euros in 2015 and it hopes this division will break even in 2017.