Share

Uncertain environment bites into Air France-KLM revenues

The company anticipates that 90% of its long-haul flights will operate July 30, as well as “more than 80%” of domestic flights and “more than 70%” of medium-haul flights to and from Paris Charles De Gaulle airport.

Advertisement

Unions representing around half of the strikers called the stoppage after marathon talks failed to reach a breakthrough on renewing a collective labour accord on rules, pay and promotions that expires in October.

The group reported a five per cent fall in revenue to €6.22 billion for the three months to June 30th when compared with the same period previous year.

The number of both French and foreign arrivals in Paris a year ago fell by 0.5 and 1.6 percent respectively, its tourist board said in a data release last week.

At the same time, there were concerns about “France as a destination” following a spate of terror attacks across the country.

The airline said it will do everything it can to minimise disruption but warned there might be last-minute cancellations and delays.

The carrier added Thursday could see “some difficulties in composition of crews” leading to “limitations in passenger numbers”.

Air France-KLM, Europe’s largest airline group by traffic, said sales in the second quarter declined to €6.2 billion ($6.8 billion).

Flights to European destinations, north Africa and Israel will be affected, as well as some routes in Asia and Africa, the company said.

As well as contending with turbulent markets, Air France-KLM is immersed in a long-running fight with unions.

Air France has confirmed it will scrap nearly a third of its domestic and medium-haul flights for a week following strike action from cabin crew.

Air France estimated that the stoppage cost it some 40 million euros ($45 million).

Advertisement

Air France-KLM, which achieved its first annual profit for four years in 2015, aided by the fuel-savings bonanza, is maintaining its 2016 goals of a free operating cash flow between 600 million euros and 1 billion euros, a unit-cost reduction of about 1 percent, and a “significant” reduction in net debt.

Police officers conduct a search as they investigate an attack on a church that left a priest dead in Saint-Etienne-du-Rouvray Normandy France Tuesday