Bruce Barnard, Special Correspondent | Jul 30, 2012 10:13AM EDT
Air France-KLM’s cargo unit posted an operating loss of 62 million euros ($76.3 million) in the second quarter compared with 14 million euros ($17.2 million) a year ago as traffic declined sharply in a bearish global air freight market.
The worsening cargo performance contrasted with improved passenger activity, which helped Europe’s largest airline to more than halve its operating loss to $81.2 million from $178.4 million last year.
Cargo revenue contracted by 4.4 percent to $940 million in the second quarter as traffic shrank by 6.9 percent and unit revenues declined by 6.7 percent after stripping out the impact of currency fluctuations. Capacity was down 3 percent from a year ago, and the load factor eased 2.7 percentage points to 64.1 percent.
First half cargo losses soared to $160 million from $28.3 million, while revenue declined 3.8 percent to $1.85 billion.
The Franco-Dutch carrier’s net loss widened to $1.1 billion from $242 million, partly due to a $453 million charge for buyouts related to planned job cuts. Revenue grew 4.5 percent to $8 billion.
Air France-KLM plans to eliminate more than 5,000 jobs at its French unit to achieve savings that CEO Jean-Cyril Spinetta says are vital to ensure the airline’s survival.
Unions representing pilots and ground workers have backed the voluntary job cuts, which account for 10 percent of Air France’s payroll, but two of the three cabin crew unions have rejected the plans.
The restructuring calls for Air France Cargo to reduce its freighter capacity by 20 percent and accelerate integration with KLM Cargo and its lower cost Dutch subsidiary Martinair, which now operates 13 of the group’s 20 freighters.
Contact Bruce Barnard at brucebarnard47@hotmail.com.
