Air France-KLM’s cargo unit swung to a $79.2 million loss in 2011 from a $19.8 million profit in 2010 amid a global glut of capacity and reduced traffic on major routes.
Europe’s largest scheduled cargo airline boosted revenue 2.6 percent to $3.9 billion as traffic shrunk 1.3 percent on a 2.4 percent increase in capacity that left the load factor down 2.5 points at 66.4 percent.
The relapse into the red following a “spectacular” rebound in 2010 was because of lower global economic growth and overcapacity, which impacted Air France-KLM even though it has reduced its capacity, said Chief Financial Officer Philippe Calavia.
Air France-KLM has idled five of its 22 freighters as part of a plan to reduce its exposure to the cyclical air cargo market. This helped the cargo unit break even in the fourth quarter despite the absence of the traditional high season.
Fourth quarter revenue dipped 3.4 percent to $1.05 billion from $1.09 million in the same period in 2010 when the cargo unit booked a $79.2 million profit. Traffic was down 4.7 percent on 0.5 percent less capacity, trimming the load factor by 2.9 points to 67.5 percent.
The Air France-KLM group booked a net loss of $1.06 billion versus a $381.5 million profit in 2010 on a 4.5 percent increase in revenue to $32.2 billion.
The company didn’t give a forecast for the current year because of uncertainty over fuel prices.
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