Air France-KLM cargo losses continue

Air France-KLM cargo losses continue

LONDON – Air France-KLM’s cargo losses narrowed in the third quarter but revenue and traffic shrank as the carrier slashed its full-freighter capacity in a bid to return to the black.

The Franco-Dutch carrier made an operating loss of 81 million euros ($89 million) down from the 102 million euros loss in the year earlier period that was affected by a two week pilots’ strike.

Revenue declined 6.3 percent – 17.8 percent on a like-for-like basis – to 584 million euros from 623 million euros last time.

Cargo volume was down 3.6 percent at 301,000 tonnes (332,000 tons) against 312,000 tonnes last time, as full-freighter capacity was reduced by 30 percent while belly capacity was up just 0.2 percent.

The carrier said full freighter losses were “significantly” reduced in the quarter as it continues to reduce its exposure to the sector.

Three Boeing 747-F s were taken out of service in the 2014-15 winter season and all five MD-11, operated by the Amsterdam-based Martinair unit, will be retired by the end of 2016.

Air France-KLM plans to operate only five full freighters by the end of next year – down from 13 in 2014 and 26 when the carriers merged in 2005. This should return the freighter unit to an operating break even in 2017 from a strike-adjusted loss of 95 million euros in 2014, the carrier said.

The third-quarter loss grew the nine month deficit to 222 million euros from 181 million euros in the year earlier period while traffic shrank 7.4 percent to 897,000 tonnes and revenue declined by 7.8 percent to 1.8 billion euros.

By contrast, the AirFrance-KLM group more than tripled third quarter earnings before interest and tax to 898 million euros from 247 million euros driven by strong summer passenger demand and low oil prices and helped by the lack of strikes that hit the year-earlier earnings by some 300 million euros.

Contact Bruce Barnard at brucebarnard47@hotmail.com.