Air France-KLM Cargo Loses $284 Million

Air France-KLM, Europe’s biggest airline by revenue, reported its cargo business plunged to a $284 million loss in fiscal 2008/2009 from a $53.4 million profit in the previous year amid slumping traffic and freight rates.

Cargo losses ballooned to $226 million in the three months to March 31 from a $1.3 million deficit a year ago as traffic fell 21.3 percent, shrinking revenue by 16.4 percent to $825 million from $987 million.

Buoyant traffic in the first six months resulted in full year revenue declining just 2.4 percent to $3.9 billion.

“A resilient performance in the first half [was] wiped out by the full force of the economic crisis in the second,” said CEO Pierre-Henri Gourgeon.

“Since six to eight weeks ago, we have seen some stabilization in the crisis in passenger and cargo, but no sign of recovery yet,” Gourgeon said.

Air France-KLM’s cargo business is set to outperform its rivals thanks to the contribution from Martinair, a Dutch cargo and charter carrier that became a fully-owned subsidiary in January.

Consolidating Martinair, the group’s first quarter cargo traffic was virtually stable compared with a year ago while capacity was up 11.5 percent. However, unit revenue “fell sharply,” the carrier said.

Overall, Air France-KLM reported a fiscal fourth quarter operating loss of $786 million against a year earlier loss of $51 million on revenue 12.2 percent lower at $6.85 billion.

This brought the carrier’s full year operating loss to $177 million compared with a $1.94 billion operating profit in fiscal 2007/2008. There was a net loss of $1.2 billion against a year-earlier profit of $1.04 billion.

The losses were the first for the Franco-Dutch carrier since the merger of Air France and KLM in 2004.

Air France-KLM has cut cargo capacity by eleven percent in the April-October summer season. It has also deferred delivery of two Boeing 777 freighters from 2009 to between 2010 and 2012.

Contact Bruce Barnard at brucebarnard47@hotmail.com.