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Topic: Air France-KLM Post Massive Loss
Username: mercure1
Posted 2013-05-03 16:59:04 and read 18628 times.

On Friday Air France-KLM group announce their first quarter financial results.

Unfortunately they post a massive loss net €630 million compared to €379 in the year-ago period. Operating loss was €530 million with slight improvements to revenue €5.72 billion.

In sign of continued turbulance, the company also declined give a financial forecast for the year, only saying statement:
“In a difficult and uncertain environment, the group continues the implementation of Transform 2015, which remains on track. We reconfirm objectives for 2013, of a reduction in unit cost on a constant currency and fuel price basis, and a reduction of net debt.”

It will be interesting what company says at its May 16 general meeting. I think they will need to refocus even harder to determine viable plan to improve business performance of enterprise. At this rate the 2015 plan might become 2025.


new article -
http://www.air-journal.fr/2013-05-03...s-au-premier-trimestre-572980.html
(in French)

Topic: RE: Air France-KLM Post Massive Loss
Username: rwy04lga
Posted 2013-05-03 17:13:43 and read 18534 times.

€630 million = $825,867,000  Wow!

Topic: RE: Air France-KLM Post Massive Loss
Username: PEK777
Posted 2013-05-03 17:26:43 and read 18416 times.

Ouch

  

Topic: RE: Air France-KLM Post Massive Loss
Username: LAXintl
Posted 2013-05-03 18:09:08 and read 18204 times.

Not a good time to be a European legacy airline.

Topic: RE: Air France-KLM Post Massive Loss
Username: mercure1
Posted 2013-05-03 19:17:36 and read 17982 times.

Below article speaks of loss.

Per the AFKL deputy group director, the first trimester was particularly bad due to cooled market with "quite low" demand on regional bases and intra-European routes. In addition he said the cargo activity short and medium-haul was concern.

He could see need for "accelerate the transformation of its short and medium-haul low cost network." including reduction of flights by 6% by accelerate the switching of short and medium-haul network to the low cost model of subsidiary Transavia.

Incidentally he also said name change is possible for Transavia which saw its own loss of €51 million during period.

http://www.lesechos.fr/entreprises-s...tte-mais-pas-ses-pertes-564148.php

Topic: RE: Air France-KLM Post Massive Loss
Username: skipness1E
Posted 2013-05-03 19:30:57 and read 17911 times.

Isn't KLM profitable and AirFrance a basket case?

Topic: RE: Air France-KLM Post Massive Loss
Username: BA0197
Posted 2013-05-03 19:33:47 and read 17910 times.

Quoting LAXintl (Reply 3):
Not a good time to be a European legacy airline.

I think BA is doing remarkably well. It is for sure the most stable airline on that continent.

AF must act radically. This cannot continue. They need to close down their regions and focus on business routes with high yield. Personally I think AF is too lax when it comes to its route choices.

Topic: RE: Air France-KLM Post Massive Loss
Username: Byrdluvs747
Posted 2013-05-03 20:14:12 and read 17705 times.

Quoting mercure1 (Reply 4):
accelerate the switching of short and medium-haul network to the low cost model of subsidiary Transavia.

Incidentally he also said name change is possible for Transavia which saw its own loss of €51 million during period.

LOL!! So even their low cost division is losing millions?

Topic: RE: Air France-KLM Post Massive Loss
Username: Deltal1011man
Posted 2013-05-03 20:18:17 and read 17671 times.

Quoting Byrdluvs747 (Reply 7):

And re-branding is going to fix it?
Good plan. I'm sure that will wrok  

Topic: RE: Air France-KLM Post Massive Loss
Username: FlyingSicilian
Posted 2013-05-03 20:27:13 and read 17624 times.

Good to hear they want to buy Alitalia too. That will help...

Topic: RE: Air France-KLM Post Massive Loss
Username: MasseyBrown
Posted 2013-05-03 20:30:41 and read 17610 times.

Quoting BA0197 (Reply 6):
AF must act radically. This cannot continue.

AF/KL is one of France's "too big to fail" companies. They'll survive one way or another.

Topic: RE: Air France-KLM Post Massive Loss
Username: IndianicWorld
Posted 2013-05-03 20:55:38 and read 17478 times.

Quoting MasseyBrown (Reply 10):
AF/KL is one of France's "too big to fail" companies. They'll survive one way or another.

Be interesting to see how given the EU's rules on govt intervention.

It would likely need to scale back considerably and make its ops much more steamlined. As soon as that last word is mentioned, the unions will jump up and down and strike, leading to more losses.

Its hard to see what they can do to turn this around at this stage.

[Edited 2013-05-03 20:56:08]

Topic: RE: Air France-KLM Post Massive Loss
Username: questions
Posted 2013-05-03 21:14:29 and read 17400 times.

Are AF in much worse shape than LH and BA? If so, what have LH and BA done that AF should do? And what should AF do regardless of what competitors have done to reverse the situation?

Topic: RE: Air France-KLM Post Massive Loss
Username: anstar
Posted 2013-05-03 21:22:09 and read 17361 times.

Quoting BA0197 (Reply 6):

I think BA is doing remarkably well. It is for sure the most stable airline on that continent.

I guess we have to wait until May 10 when they release their Q1 results also.

I think a lot of airlines are finding it tough in Europe - plus all the regulation with delays and compensation surely is a contributor as well as very high taxes.

Topic: RE: Air France-KLM Post Massive Loss
Username: Byrdluvs747
Posted 2013-05-03 22:02:27 and read 17259 times.

Quoting questions (Reply 12):
If so, what have LH and BA done that AF should do?

They joined OW and Star.     


As a diehard OW pax I don't care for AF or skyteam, but with that said I think AF is going to have to begin the process of scaling back to more profitable routes in order to scale back the losses. This obviously translates into layoffs in a country with very pro labor laws.

On a side note, this news foretells bad days ahead for AZ with a huge scaling back almost guaranteed, and at worst a total shutdown.

Topic: RE: Air France-KLM Post Massive Loss
Username: BestWestern
Posted 2013-05-03 22:09:52 and read 17232 times.

Quoting Byrdluvs747 (Reply 14):
As a diehard OW pax I don't care for AF or skyteam

I'm a skyteam loyalist. The problem with AF (and i'm a regular) is that their cost base does not match their sup par passenger product yields. I've switched my flying from China to Europe to CZ rather than AF because their hard product is better, their soft product improving month by month and the fares market leading.

Topic: RE: Air France-KLM Post Massive Loss
Username: LAXintl
Posted 2013-05-03 23:04:04 and read 17066 times.

So besides a significant network, and consumer brand knowledge is there anything good going on at AF these days?

AF seems to be getting hit in so many areas:
- Domestic market under attack from LCCs and trains
- Europe market is weak, no help from economic malaise on the continent
- Regional ops massive loss making and just put under Hop brand - results TBA
- Long haul taking hits especially by ME3 and dilution of transit traffic
- Sustain longtime loss making services to carry the flag (eg Tahiti)
- Freight division in pieces having seen much of fleet slashed
- Even its LCC Transavia taking losses
- Main hub Paris split into two airports
- Large legacy corporate overhead
- Very strong union workforce
- High cost base
- French social politics
- Dutch-French cultural differences.
- etc.


I suppose my next question is, where does one even start to fix these   

=

[Edited 2013-05-03 23:05:46]

Topic: RE: Air France-KLM Post Massive Loss
Username: IndianicWorld
Posted 2013-05-03 23:54:20 and read 16781 times.

Trying to fix all those issues will take a miracle at this rate.

The ME3 carriers are only getting stronger year by year, but at least AF has joined in a partnership agreement with EY. Taking the same approach as QF in getting into bed with one of your biggest threats (EK in that case) is a smart move.

Union power and the inability to right size the airline are massive issues for many carriers, but AF seems to have an even harder task. No idea on a solution there.

Having 2 hubs in Paris is not ideal, but this is not a huge issue IMHO. ORY is strategically linked to many O&D markets and CDG is the main transfer orientated hub for the airline.

The move to try and ward off the LCC competition at the regional bases appears to have been a failure, but they were between a rock and hard place on that one.

Transavia likely needs to be used more aggressively in such markets as the regional bases, whilst growing the overall market potential for AF-KL to compete in their core sectors. Getting that mix right is likely to be a big challenge over the next few years.

Topic: RE: Air France-KLM Post Massive Loss
Username: blueflyer
Posted 2013-05-04 00:19:23 and read 16550 times.

My God the sky is falling...

Quoting mercure1 (Thread starter):
Unfortunately they post a massive loss net €630 million compared to €379 in the year-ago period.

The net loss is essentially due to a €250 millions write-down in the value of fuel hedges and foreign currencies. Adjusted operating result is up over last year's, when despite posting a bigger adjusted loss for the first quarter, the group ended with a (tiny) adjusted profit of €25 millions at the end of 2012.

I'm not saying things are rosy, far from it, but they're not that bad (not that Air France - KLM would admit it, it would be hard to extract more concessions from the unions). Passenger unit revenue continues on its upwards trend while passenger unit cost is finally coming down. Cargo is more worrisome. Everything is falling, but revenue is falling faster than cost and volume faster than capacity. And then there's the regional network...

Most importantly, the group claims they are still on track with the Transform 2015 plan. Time will tell...

Quoting BA0197 (Reply 6):
AF must act radically. This cannot continue.

With over €4 billions in cash, another €1.85 billions in available credit lines and a positive cash flow for the quarter, this can continue for a while...

[Edited 2013-05-04 00:20:58]

Topic: RE: Air France-KLM Post Massive Loss
Username: awacsooner
Posted 2013-05-04 01:15:47 and read 16035 times.

Quoting FlyingSicilian (Reply 9):
Good to hear they want to buy Alitalia too. That will help...

Why not go for the double play and ask to buy IB?

Sadly, I think AF might go the way of KLM and start charging for bags soon...

Topic: RE: Air France-KLM Post Massive Loss
Username: SR4ever
Posted 2013-05-04 01:34:28 and read 15854 times.

Quoting LAXintl (Reply 16):
So besides a significant network, and consumer brand knowledge is there anything good going on at AF these days?

- a vastly improved experience at CDG in the past months
- yields still very high in J class, albeit the hard product is somehow dated
- improvements in F and J soft product
- recast of F and J hard product in sight

Quoting LAXintl (Reply 16):
- Domestic market under attack from LCCs and trains

- Yes, but action has been taken: withdrawal of CDG-SXB (replaced with code-shared TGV), downgauges on ORY-SXB, CDG-MLH

Quoting LAXintl (Reply 16):
- Europe market is weak, no help from economic malaise on the continent

Agreed and even the LH Group now starts suffering from that, although its home countries do better than the rest of Europe

Quoting LAXintl (Reply 16):
- Regional ops massive loss making and just put under Hop brand - results TBA

Hop will be an incremental process. So far, better fleet utilization has already been achieved. Expect more efficiency again as the 3 constituent airlines are merged into a single one.

Quoting LAXintl (Reply 16):
- Long haul taking hits especially by ME3 and dilution of transit traffic

Agreed, but a decent partnership with EY and another one with ME could help.

Quoting LAXintl (Reply 16):
- Sustain longtime loss making services to carry the flag (eg Tahiti)

I doubt CDG-PPT is loss-making, in view of the yields

Quoting LAXintl (Reply 16):
- Freight division in pieces having seen much of fleet slashed

It seems KL is taking over that...

Quoting LAXintl (Reply 16):
- Even its LCC Transavia taking losses

Transavia has a higher cost base than a real LCC, so no wonder here. The brand and the pricing are not that attractive either.

Quoting LAXintl (Reply 16):
- Main hub Paris split into two airports

Yes and no, has CDG and ORY operation are now self-contained and segregated from each other, with more efficiency on both sides.

Quoting LAXintl (Reply 16):

- Very strong union workforce
- High cost base
- French social politics

Agreed, a real issue, but working organisation is changing in the right way. But too many ground/admin jobs maintained for political reasons (Eg: Corsica, where AF has a declining operational presence)

Another bad thing for AF is the downgrading of their Y shorthaul product: pay a bit less (or the same as before), get a lot less, which may have pushed further traffic to LCCs...

[Edited 2013-05-04 01:37:01]

Topic: RE: Air France-KLM Post Massive Loss
Username: airproxx
Posted 2013-05-04 04:02:01 and read 14686 times.

Quoting mercure1 (Reply 4):

He could see need for "accelerate the transformation of its short and medium-haul low cost network." including reduction of flights by 6% by accelerate the switching of short and medium-haul network to the low cost model of subsidiary Transavia.

Incidentally he also said name change is possible for Transavia which saw its own loss of €51 million during period.

http://www.lesechos.fr/entreprises-s...8.php
Quoting Byrdluvs747 (Reply 7):
LOL!! So even their low cost division is losing millions?
Quoting LAXintl (Reply 16):
- Even its LCC Transavia taking losses

I do not know where you get your information, but according to this article;

http://www.air-journal.fr/2013-02-15...transavia-est-rentable-567071.html

Transavia France has been profitable since 2012 ...
The AF low cost airline was granted a period of 5 years to break even, and the goal is reached.
In fact, Transavia France is becoming the new model of AF for short and medium haul network. The model is loosely based on what Lufthansa did with Germanwings.

Moreover, the unions of Air France pilots are already prepared to transfer AF activity to Transavia. Some AF pilots are currently seconded to the low cost airline, and if the results are satisfactory, other operations of this kind are to hope.
It now takes on the development of Transavia France to counter competition from low costs and regain market share in our own territory. AF took a long time, too long to react, but the change is underway.

In addition, we must explain the current poor performance by a simple observation: the social burdens on the French employers are among the highest in the world. A study for the SNPL showed that if AF moved its headquarters in Holland, the savings on taxes would be about 700 to 800 million €!
For obvious political reasons, AF can not do it, but the competition conducted by the other European companies quickly becomes uneven. Easyjet for example, operates in France aircraft registered in England and crews with English work contracts, therefore not subject to the same taxes that French workers.

Obviously, all this is not an excuse, and poor performance of AF are not only due to this kind of phenomenon. The long haul is also particularly affected.

In terms of cargo, AF decided almost instantly to abandon all cargo aircraft in favor of holds of passenger aircraft. And 777 proved to be a major asset in this strategy.

I personally think that the poor health of Air France is due to the total lack of industrial project from the leaders. From 3 to 4 years, successive CEO bent on wanting to reduce the costs, even at the expense of product quality offered to passengers, without worrying about the impact on customers. Sure efforts were to provide. The payroll is still too high, waste too frequent, and the product not in competition.
AF continues its reform, in pain, but without a real project to follow, all efforts will come to naught.

http://www.latribune.fr/entreprises-...les-coupes-dans-les-effectifs.html

Europe is in recession, the French state in a state of deliquescence, and AF will have to adapt, survive, or die.

Topic: RE: Air France-KLM Post Massive Loss
Username: vio
Posted 2013-05-04 05:05:46 and read 14177 times.

Well its' hard to compete with the LCCs of today. People jus aren't willing to pay 400 Euros to fly one way from Amsterdam to Budapest. For the past 3 weeks I've been looking for a (one way) ticket from London to Bucharest and they're ridiculously expensive. BA is the only one that had anything reasonable. In the end I opted for Wizzair, even if it means changing airports.

Topic: RE: Air France-KLM Post Massive Loss
Username: kl838
Posted 2013-05-04 05:48:58 and read 13820 times.

Air France for the last couple of years have been focused on cutting costs and trying to make their short haul flights profitable. Having just flown Air France 2 weeks ago, I must say that their new terminal in CDG is a big improvement and was desperately needed. Many people I know avoid Air France because of CDG, and I must say that the experience transferring through 2E and F is much easier and not a hell hole when it was spread out between 3 or 4 terminals.

Yet, I find that despite being one of Europe's premiere airlines, they need to dramatically improve their products in all classes, especially Affaires & Premiere. I have noticed that in Economy, they have stopped offering the amenity kit on long haul flights, something which they have offered for as long as I can remember, and I am not sure how the new products are in Affaires & Premiere, but based on all the reviews they do need an improvement in all areas. Especially hard product, and what I don't understand is why couldn't Air France opt for a fully lie flat seat like they have now done when they were changing the seats a year or so ago? This extra cost of refitting in to a seat that is already behind was just not needed.

If Air France are sustaining loss making flights, that needs to stop immediately, as they are no longer a fully state owned airline. Yes, their cost base is significantly higher than others in Europe due to strong Unions, but if Air France actually dramatically improves their soft and hard products across the board to lets say the level of Singapore Airlines, and charge accordingly they have the possibility of actually making a profit. There are many frequent flyers that on long haul flight would pay slightly more to have a better product.

For short haul operations, Air France have moved in the right direction by rebranding all the regionals into Hop!, makes it easier for the consumer as well as from an operations standpoint. They have reported that the new Mini prices have been a success, but for a premium airline I am not sure that is suits their image. As they have Transavia that should be doing all the low cost flying. If Air France have a strong loyal customer base they will transfer through CDG on their shorthaul flights, yet there is no incentive to be loyal with their program Flying Blue. I have raked in miles over years to obtain 3 or so free flights, and that was when you can get 100% miles for any economy ticket.

As I type this, there is an ad banner for Air France offering amazing deals to several countries, but most of these people that would actually get these deals would not choose Air France when they charge slightly higher. This is where loyal customer base comes in, and if Air France chases away their loyal customers, they are basically killing themselves. I consider myself a loyal Air France - KLM flyer, granted I fly at the most 3 or 4 times a year, but I have been doing so for the last 16 years, and I am only 20. My parents and I would always choose Air France - KLM even if it is more expensive than the competition. We try to fly Singapore Airlines within Asia, but based on a couple very negative experiences, we have refrained from ever flying Singapore Airlines again, and my mom is Singaporean.

In short:

- Improve products throughout all classes and provide a consistent experience
- Reward the extremely loyal flyers, revise the program that gives more rewards
- Cut any loss making routes, or adjust accordingly to at least sustain some profit
- Advertise the new experience connecting through CDG, a lot of people don't know
- With strong products at the level of Qatar, SQ, Emirates, Etihad it would provide a consistent experience with agreement with Etihad, would also justify the cost of paying extra for an Air France flight.
- Make transavia stronger in the low cost market, cutting their costs as much as possible.

Topic: RE: Air France-KLM Post Massive Loss
Username: airproxx
Posted 2013-05-04 06:17:04 and read 13535 times.

Quoting kl838 (Reply 23):
Yet, I find that despite being one of Europe's premiere airlines, they need to dramatically improve their products in all classes, especially Affaires & Premiere. I have noticed that in Economy, they have stopped offering the amenity kit on long haul flights, something which they have offered for as long as I can remember, and I am not sure how the new products are in Affaires & Premiere, but based on all the reviews they do need an improvement in all areas. Especially hard product, and what I don't understand is why couldn't Air France opt for a fully lie flat seat like they have now done when they were changing the seats a year or so ago? This extra cost of refitting in to a seat that is already behind was just not needed.

Maybe AF leaders heard your remarks, check this link;

http://corporate.airfrance.com/en/pr...d-million-euros-for-its-customers/

And on a side note, the amenity kit product has never been stopped, the only change is that the FA gives it in hand to customer shortly after boarding.

Cheers

Topic: RE: Air France-KLM Post Massive Loss
Username: Aesma
Posted 2013-05-04 06:23:14 and read 13946 times.

You all talk about AF (mentioning Paris etc.) but this is about AF/KL, and there is no way to know if one brand makes money and the other loses.

Quoting mercure1 (Reply 4):
He could see need for "accelerate the transformation of its short and medium-haul low cost network." including reduction of flights by 6% by accelerate the switching of short and medium-haul network to the low cost model of subsidiary Transavia.

Incidentally he also said name change is possible for Transavia which saw its own loss of €51 million during period.

The problem I see with Transavia, and also with Hop! (but at least Hop! is booked along AF flights on AF website) is that nobody knows it has anything to do with AF/KL, and it's not a well known brand overall.

Quoting IndianicWorld (Reply 17):
Having 2 hubs in Paris is not ideal, but this is not a huge issue IMHO. ORY is strategically linked to many O&D markets and CDG is the main transfer orientated hub for the airline.

Well the problem is that many flights are duplicated because of this. I often fly PAR-BES, usually from ORY since it's near home but sometimes from CDG just to ride a new airplane (A318 or CRJ1000NG for example), so I know there are many flights a day, often half empty. When flying BES-ORY there is an announcement about ways to connect to CDG, but man, if you're doing this you chose the wrong flight !

Quoting blueflyer (Reply 18):
The net loss is essentially due to a €250 millions write-down in the value of fuel hedges and foreign currencies.

Trouble is they forecast betters numbers for 2013 "on a constant currency and fuel price basis"...

Quoting awacsooner (Reply 19):
Sadly, I think AF might go the way of KLM and start charging for bags soon...

AF and KLM are the same group, AF is now charging for bags, or rather they offer a discounted fare without hold luggage, miles, choice of seat...

Topic: RE: Air France-KLM Post Massive Loss
Username: Polot
Posted 2013-05-04 06:56:36 and read 13475 times.

Quoting airproxx (Reply 21):
I do not know where you get your information, but according to this article;

http://www.air-journal.fr/2013-02-15...transavia-est-rentable-567071.html

Transavia France has been profitable since 2012 ...
The AF low cost airline was granted a period of 5 years to break even, and the goal is reached.
In fact, Transavia France is becoming the new model of AF for short and medium haul network. The model is loosely based on what Lufthansa did with Germanwings.

He is getting his numbers from the opening post. Your article is from February. The OP's is from May. Also the article you link to only specifically talks about Transavia France, while the other article is likely talking about Transavia as a whole.

Topic: RE: Air France-KLM Post Massive Loss
Username: kl838
Posted 2013-05-04 06:57:03 and read 13792 times.

Quoting airproxx (Reply 24):
Maybe AF leaders heard your remarks, check this link;

http://corporate.airfrance.com/en/pr...d-million-euros-for-its-customers/

And on a side note, the amenity kit product has never been stopped, the only change is that the FA gives it in hand to customer shortly after boarding.

Cheers

I was aware they are in the process of upgrading the cabins, and I really do hope Air France designs the cabins with the elegance that French are known for. As for the amenity kits, there is no longer a "kit", rather just headphones in a plastic wrap with an eye mask and moist toilette. They no longer offer the ear plugs, which I think are more important than the moist toilette, and the presentation just screams cheap now.

Quoting Aesma (Reply 25):

You all talk about AF (mentioning Paris etc.) but this is about AF/KL, and there is no way to know if one brand makes money and the other loses.

The reason everyone mentions only Air France, is because it is always the case that they are the major loss making decision. Yet, no one is sure whether its because all the profits are transferred to KLM, or Air France is in fact the one losing all this money. KLM though has already been updating all its products with better soft and hard products for both classes.

Topic: RE: Air France-KLM Post Massive Loss
Username: PHX787
Posted 2013-05-04 07:31:14 and read 13470 times.

Quoting MasseyBrown (Reply 10):
AF/KL is one of France's "too big to fail" companies. They'll survive one way or another.

Or get Nationalized completely by Hollande's government  
Quoting LAXintl (Reply 16):
- Domestic market under attack from LCCs and trains

This is where AF needs to drop something fancy like a JV-LCC, or cut and run outta there. Get rid of the A318s and the "regional" fleets, and just focus on the big picture flights.

Quoting LAXintl (Reply 16):
- French social politics

Hollande is pissing a lot of people off (but this is for the non-av forum)

Topic: RE: Air France-KLM Post Massive Loss
Username: airproxx
Posted 2013-05-04 07:40:26 and read 13330 times.

Quoting Polot (Reply 26):
He is getting his numbers from the opening post. Your article is from February. The OP's is from May

Figures didn't change so far!
TO is actually making money since 2012, and a fleet increase is planned for the next few years. Here's a link:

http://www.lefigaro.fr/flash-eco/201...ia-france-retour-a-l-equilibre.php

Quoting Polot (Reply 26):
Also the article you link to only specifically talks about Transavia France, while the other article is likely talking about Transavia as a whole.

Here's the extract from the OP's link:

Les « autres activités » comprennent principalement les activités loisirs du groupe Transavia et l’activité catering de Servair. Au premier trimestre 2013, elles ont généré un chiffre d’affaires en hausse de 7,5% à 229 millions d’euros (dont 134 millions d’euros pour la filiale low cost, +14,5%), et un résultat d’exploitation négatif de 53 millions d’euros (-41 millions d’euros au 31 mars 2012).

Article refers to "other activities" of Air France, which includes INTER ALIA company caterning Servair and Transavia. It is a set a bit vague to actually designate where the loss of money is. But in light of recent figures released by Transavia France alone, I can assure you that Transavia France is Beneficiary. I think this is a good example of what can be achieved by Air France in terms of restructuring. Obviously, as long as we want to read the articles of the OP correctly.

Topic: RE: Air France-KLM Post Massive Loss
Username: airproxx
Posted 2013-05-04 07:41:58 and read 13320 times.

Quoting PHX787 (Reply 28):

Hollande is pissing a lot of people off

This is correct !

Topic: RE: Air France-KLM Post Massive Loss
Username: LAXintl
Posted 2013-05-04 07:57:48 and read 13179 times.

Quoting SR4ever (Reply 20):
I doubt CDG-PPT is loss-making, in view of the yields

See

Air France had to reveal as result of ongoing court case versus its unions that the PPT line lost almost €8mil in the last year and accumulated losses deficit amount to €69.5mil the last 7-years in the route.

Air Tahiti Nui Seeks ATI-JV With Air France, Delta (by LAXintl Apr 15 2013 in Civil Aviation)

Quoting airproxx (Reply 21):
I do not know where you get your information, but according to this article;

The AF own financial results -

Here is the press release

Shows Transavia with loss in Q1.

Operating result (€m) -51

http://www.airfranceklm-finance.com/...7170/42052/file/Res_Q1_2013_VA.pdf

=

Topic: RE: Air France-KLM Post Massive Loss
Username: timboflier215
Posted 2013-05-04 08:02:51 and read 13087 times.

Didn't LH also post a similar loss for Q1? Not sure if this loss is reason enough to push the panic button....

Topic: RE: Air France-KLM Post Massive Loss
Username: airproxx
Posted 2013-05-04 08:08:51 and read 12986 times.

Quoting LAXintl (Reply 31):

Ok I get it now.
My figures were showing a whole operating year results, while this figures show only Q1.
But I do maintain that a whole year report will show TO beneficiary this year too.
As a seasonal operator, a winter loss makes sense. The most activity of TO is very concentrated during summer season.

I was about to post the same link than you did, thanks.

Cheers

Topic: RE: Air France-KLM Post Massive Loss
Username: Aesma
Posted 2013-05-04 08:09:36 and read 12991 times.

Quoting kl838 (Reply 27):
The reason everyone mentions only Air France, is because it is always the case that they are the major loss making decision. Yet, no one is sure whether its because all the profits are transferred to KLM, or Air France is in fact the one losing all this money. KLM though has already been updating all its products with better soft and hard products for both classes.

Well we see with Transavia that the French division is the one making money.

Quoting PHX787 (Reply 28):
Hollande is pissing a lot of people off (but this is for the non-av forum)

If you mean the unions, then I agree. He managed to pass a law simplifying layoffs and such, something the right-wing never managed to do.

Quoting PHX787 (Reply 28):
This is where AF needs to drop something fancy like a JV-LCC, or cut and run outta there. Get rid of the A318s and the "regional" fleets, and just focus on the big picture flights.

Remember it's not Air Paris but Air France.

Topic: RE: Air France-KLM Post Massive Loss
Username: Polot
Posted 2013-05-04 08:38:54 and read 12628 times.

Quoting timboflier215 (Reply 32):
Didn't LH also post a similar loss for Q1? Not sure if this loss is reason enough to push the panic button....

LH lost 459 million euros. While I don't know if this is enough to hit the panic button yet, it is something that should be giving the airlines some serious cause for concern- it shouldn't be dismissed simply because it occurred during the weak Q1 period. Because before you know it your profits in Q2 and Q3 weaken and the worse shape you are in the harder it is to turnaround.

Although, for purely nationalistic reasons, I find it highly amusing how the "terrible, poorly run" US airlines are financially beating the crap out of most of the European legacies.

Topic: RE: Air France-KLM Post Massive Loss
Username: Aesma
Posted 2013-05-04 08:46:17 and read 12453 times.

Well the European legacies haven't been in bankruptcy recently.

Topic: RE: Air France-KLM Post Massive Loss
Username: readytotaxi
Posted 2013-05-04 08:56:50 and read 12333 times.

The situation with AF is similar to re-arranging the deck chairs on the Titanic, you know its gonna happen.     

Topic: RE: Air France-KLM Post Massive Loss
Username: Polot
Posted 2013-05-04 08:59:56 and read 12358 times.

Quoting Aesma (Reply 36):
Well the European legacies haven't been in bankruptcy recently.

And frankly, with the exception of AA, neither have the US legacies. Its been 6 years since DL left, 7 since UA emerged, and 7.5 years since US exited bankruptcy protection (time sure does fly). Also since leaving all of them have undergone largely successful (expensive) mergers with other large carriers.

Topic: RE: Air France-KLM Post Massive Loss
Username: timboflier215
Posted 2013-05-04 09:12:02 and read 12156 times.

Quoting Polot (Reply 38):
Its been 6 years since DL left, 7 since UA emerged, and 7.5 years since US exited bankruptcy protection

Yes, and as their costs begin to creep up again as contracts negotiated in bankruptcy come up for renewal, we will see whether this miraculous financial performance continues....

Quoting Polot (Reply 35):
LH lost 459 million euros

Exactly my point. Why this panic over the future of AF, when LH performed similarly poorly?

Topic: RE: Air France-KLM Post Massive Loss
Username: LAXintl
Posted 2013-05-04 09:20:38 and read 12057 times.

Quoting timboflier215 (Reply 39):
Exactly my point. Why this panic over the future of AF, when LH performed similarly poorly?

Except the Lufthansa loss was smaller in both actual and relative basis for its larger size, plus the company had some special charges in Q1 for strikes and severance restructuring cost.
More importantly LH reiterated is expects a profit of about €500m+ this year. Air France did not even attempt to provide the guidance.

So yes there is continued needed emphasis on restructuring at LH also, however seemingly the company is on a much better track to achieve its goals versus Air France.

Topic: RE: Air France-KLM Post Massive Loss
Username: Polot
Posted 2013-05-04 09:21:59 and read 12049 times.

Quoting timboflier215 (Reply 39):
Exactly my point. Why this panic over the future of AF, when LH performed similarly poorly?

The problem is that AF/KLM has been unprofitable for more than just Q1 2013. They lost money Q1 2012, Q2 2012, Q4 2012 and FY 2012 for example. LH loss money Q1 last year, but were still able to turn around and make a profit for the full year.

Topic: RE: Air France-KLM Post Massive Loss
Username: mercure1
Posted 2013-05-04 09:51:40 and read 11698 times.

Quoting SR4ever (Reply 20):
I doubt CDG-PPT is loss-making, in view of the yields

Yes unfortunately as linked in Reply 31 it come out this week that Polynesie Francaise line has been loss making for last 7-years.

While no one want to see loss of Air France in market, one has to wonder how many such loss producing lines is AF supporting?

As commercial enterprise I think its important that markets cannot be maintained simply for patriotic reasons.

And your comment about yields - Paris - Tahiti is almost 16,000kms, and with fares of €1,000 - 1,200 possible that is not so much revenue to circle the globe almost with 20 hours of aircraft utilization each way.

Topic: RE: Air France-KLM Post Massive Loss
Username: airproxx
Posted 2013-05-04 11:06:37 and read 11062 times.

Quoting timboflier215 (Reply 39):
Quoting Polot (Reply 35):
LH lost 459 million euros

Exactly my point. Why this panic over the future of AF, when LH performed similarly poorly?

Well, the difference between LH and AF, is that LH have a precise plan to get through it, and recover profit situation, while it looks like AF doesn't have any idea of how to fix this... And honestly I'm getting worried now..

Topic: RE: Air France-KLM Post Massive Loss
Username: ewr767
Posted 2013-05-04 11:33:24 and read 10763 times.

i would bet my last dollar that its because they charge or dont charge for liquor...c previous ua charging for liquor post and why i quote...thats the reason we are loosing millions of dollars...end quote....Rediculous

Topic: RE: Air France-KLM Post Massive Loss
Username: FURUREFA
Posted 2013-05-04 11:59:48 and read 10512 times.

Quoting timboflier215 (Reply 39):
Quoting Polot (Reply 38):
Its been 6 years since DL left, 7 since UA emerged, and 7.5 years since US exited bankruptcy protection

Yes, and as their costs begin to creep up again as contracts negotiated in bankruptcy come up for renewal, we will see whether this miraculous financial performance continues....

That would be ignoring the structural changes that have taken place in the landscape of the industry in the United States, most notably massive consolidation and firm commitment to capacity discipline. The mindset of the industry is very different than it was 15, or even 5 years ago.

Topic: RE: Air France-KLM Post Massive Loss
Username: MasseyBrown
Posted 2013-05-04 12:06:56 and read 10456 times.

Quoting IndianicWorld (Reply 11):
Be interesting to see how given the EU's rules on govt intervention.

When it comes to survival, do you think France (or any other country) cares? If the private economy can't, the state will find a way to preserve AF.

Topic: RE: Air France-KLM Post Massive Loss
Username: airproxx
Posted 2013-05-04 12:30:12 and read 10207 times.

Quoting MasseyBrown (Reply 46):

Yes, agreed, just like Italy did with AZ when the airline was close to collapse... So now AZ is still alive.... But with which prospectives, and for how long?

Topic: RE: Air France-KLM Post Massive Loss
Username: lehovec
Posted 2013-05-04 13:15:58 and read 9814 times.

Quoting airproxx (Reply 21):
Easyjet for example, operates in France aircraft registered in England and crews with English work contracts, therefore not subject to the same taxes that French workers.

All EZY flight deck and cabin crew are employed on local contracts in France (and other countries for that matter), so are subject to French taxes and contribution. This has been the case now for many years (since 2008 if I remember rightly).

FR did not want to employ staff on local contracts so had to close MRS base a couple of years ago.

Topic: RE: Air France-KLM Post Massive Loss
Username: mercure1
Posted 2013-05-04 13:18:28 and read 9762 times.

Quoting FURUREFA (Reply 45):
That would be ignoring the structural changes that have taken place in the landscape of the industry in the United States, most notably massive consolidation and firm commitment to capacity discipline. The mindset of the industry is very different than it was 15, or even 5 years ago.

  

I think America already experience very difficult period for its airlines, and decisions had to be taken to balance the books.
After long time it appears things have turned out good finally.

But I think Europe is only now starting to realize they also face these same industry problems.
However unlike America where many decisions are clear and based on balance sheet figures, things in Europe are much more mixed as there is always social component and politics involved that enterprise must also balance.

I suspect the heads of AF would be very happy to follow an American path to cleanse the enterprise with a single massive shock, but such options are simply not possible and so they must proceed with much more lengthy process to find agreeable smaller changes which hopefully combined produce some results. Time will tell.

Topic: RE: Air France-KLM Post Massive Loss
Username: aerokiwi
Posted 2013-05-04 13:45:13 and read 9489 times.

So why didn't AF use Transavia France to operate the routes from regional cities, TLS, LYN etc?

Topic: RE: Air France-KLM Post Massive Loss
Username: airproxx
Posted 2013-05-04 14:23:43 and read 9168 times.

Quoting lehovec (Reply 48):

This is not what my Easy Pilots friends say so far!
A friend of mine, FO based in CDG is still paid in pounds, and has an English contract. To my knowledge, the only country forcing Easy to have local contracts with a country based airline is Switzerland, with TopSwiss...

Quoting aerokiwi (Reply 50):

That's the real question really. But I believe it's just a matter of time before TO took over some AF legacy lines on medium haul network.

Topic: RE: Air France-KLM Post Massive Loss
Username: Polot
Posted 2013-05-04 14:56:20 and read 8967 times.

Quoting airproxx (Reply 51):
That's the real question really. But I believe it's just a matter of time before TO took over some AF legacy lines on medium haul network.

  
If LH's plan with Germanwings works out it would not surprise me the slightest if AF/KLM emulates it with Transavia France.

Topic: RE: Air France-KLM Post Massive Loss
Username: Aesma
Posted 2013-05-04 15:38:31 and read 8634 times.

Well can you book a Transavia flight or Transavia+AF on AF website ? I don't think so. I think the current idea is for people to stay in the dark about the ownership of Transavia, having Transavia only to balance the books and keep the other LCCs honest, AF doesn't want any association with the LCC image. It is also a good way to offer jobs to AF employees that need to go

Quoting airproxx (Reply 51):
This is not what my Easy Pilots friends say so far!
A friend of mine, FO based in CDG is still paid in pounds, and has an English contract. To my knowledge, the only country forcing Easy to have local contracts with a country based airline is Switzerland, with TopSwiss...

So he doesn't have an address in the UK ? There were court fights about this, in France but first in Germany, both against U2 and Ryanair. The idea being that if you live here you need a local contract.

Topic: RE: Air France-KLM Post Massive Loss
Username: VV701
Posted 2013-05-05 04:22:25 and read 7723 times.

Quoting anstar (Reply 13):
I guess we have to wait until May 10 when they release their Q1 results also.

Yes. However data released so far for BA for Q1 2013 looks encouraging.

Even with the addition of BD, available seat kilometres increased by only 1.7 per cent. However revenue passenger kilometres were up by 5.6 per cent. So there are indications are that BA is already getting to grips with BD's losses where others have previously failed. But in the end it will all come down to yields and the additional costs of absorbing BD's operations. So we will have to wait a few more days.

IB is a very different kettle of fish. There available seat kilometres were down -12.2 per cent in Q1 2013 but actual revenue passenger kilometres were down by more at -15.2 per cent. So there can be little doubt that the financials for IB's first quarter will, when they are released next Friday, be far from good.

Topic: RE: Air France-KLM Post Massive Loss
Username: airproxx
Posted 2013-05-05 06:03:08 and read 7535 times.

Quoting Aesma (Reply 53):
So he doesn't have an address in the UK ? There were court fights about this, in France but first in Germany, both against U2 and Ryanair. The idea being that if you live here you need a local contract.

I'll check that out with him as soon as I can, but yes, that surprised me back then... I remember the CityJet case...

Topic: RE: Air France-KLM Post Massive Loss
Username: Wisdom
Posted 2013-05-05 09:00:26 and read 7304 times.

I think that AF's steady decline has started right around the period of the crash of AF447. While I was searching google with the keywords "Air France 5 year results" to back-up this statement, the first link that appeared was the wikipedia link to AF447.

AF447 has received major media attention as the search period was very extended. The final report was a major blow to AF as well, as it didn't exonerate it, quite to the opposite, it uncovered a major safety culture problem at AF.

AF also has a major attitude problem at all levels. Many people who work there think that they are it. This is a major issue when it comes to commercial dealings with other businesses, as I have experienced. My business has decided not deal with AF anymore after one of their employees required us to send samples to his private address. He later claimed that those were submitted for testing and were found to be "as good" as his current supplier's, while this was clearly not the case.

Furthermore, Hop! will be a major failure in my eyes. This marketing name is not attractive. Integration of the different regional brands was long overdue, but this branding is a major failure.

AF will not transform for the better by 2015. KL is coming to a point where widebody replacement isn't coming fast enough and this will soon turn KL into a difficult operation to manage.

Unless anything changes fast enough, AF-KL will end-up becoming a Etihad subsidiary.

Topic: RE: Air France-KLM Post Massive Loss
Username: mjoelnir
Posted 2013-05-05 09:59:48 and read 7186 times.

For many airlines operating in Europe the 1Q results should not be taken at face value but only compared to the years before.
There are several airlines making every year a loss in Q1 and decent profit over the year.
Operating results for the Q1 are often small and not high enough for the capital cost and depreciation.
Than you get the money earning Q2 and Q3 and perhaps a break even Q4.
If the whole year ends with a plus everything is OK.

Topic: RE: Air France-KLM Post Massive Loss
Username: rwy04lga
Posted 2013-05-05 11:28:47 and read 7043 times.

Quoting Wisdom (Reply 56):
Unless anything changes fast enough, AF-KL will end-up becoming a Etihad subsidiary.

If Delta can't buy AF/KL, how could EY? Better for VS to buy AF/KL.

Topic: RE: Air France-KLM Post Massive Loss
Username: Wisdom
Posted 2013-05-05 12:26:24 and read 6936 times.

Quoting rwy04lga (Reply 58):
If Delta can't buy AF/KL, how could EY? Better for VS to buy AF/KL.

I guess that in the context of globalisation and global trade there will come a time in the future where foreign ownership will be less and less an issue. Those regulations date from the era of the WW's, where airlines and their equipment were considered tools that could be used in the eventuality of war against each other.

VS is a candidate on the selling side rather than buying side. My guess is that they won't stick around either if they don't start diversifying and feeding their LHR/LGW network. Their product is dying.

Topic: RE: Air France-KLM Post Massive Loss
Username: anstar
Posted 2013-05-05 23:23:40 and read 6452 times.

Quoting Wisdom (Reply 59):
VS is a candidate on the selling side rather than buying side.

Branson has already said his 51% stake is not for sale so I don't agree that it is a candidate to sell.

Which is precisely what the DL JV is going to do as well as their domestic feeder flights.

Topic: RE: Air France-KLM Post Massive Loss
Username: lehovec
Posted 2013-05-06 00:38:49 and read 6368 times.

Quoting airproxx (Reply 51):

I don't know what your friends tell you but I have local french contract with EZY, don't really want to publish my payslip here   but i sure do pay french income tax and contributions. Same is with my colleagues in Italy, Germany and Portugal. EZY would like not to pay local taxes&contributios and tried but lost court cases in both Germany and France and since then (again I believe it was 2008) decided to change all contracts to local ones,
Some FO's which are not employed by EZY (ctc, parc aviation etc) might have different contracts but they are not employed by EZY.

Topic: RE: Air France-KLM Post Massive Loss
Username: Aesma
Posted 2013-05-06 05:19:11 and read 5980 times.

Quoting Wisdom (Reply 59):
I guess that in the context of globalisation and global trade there will come a time in the future where foreign ownership will be less and less an issue.

Globalization being a foul word in France, AF will not be the first airline owned by out of EU owners (and my bet for a bid would be Qatar, they're buying our country one building and company at a time).

Topic: RE: Air France-KLM Post Massive Loss
Username: LAXintl
Posted 2013-05-06 08:36:38 and read 5686 times.

Quoting mjoelnir (Reply 57):
For many airlines operating in Europe the 1Q results should not be taken at face value but only compared to the years before.

I think we can safely say, the AF performance was terrible --

net loss €630 million compared to €379 in the year-ago period.

Topic: RE: Air France-KLM Post Massive Loss
Username: mozart
Posted 2013-05-06 08:46:47 and read 5658 times.

Quoting Aesma (Reply 62):
Globalization being a foul word in France, AF will not be the first airline owned by out of EU owners (and my bet for a bid would be Qatar, they're buying our country one building and company at a time).

That is a urban myth, repeated all over France. As a matter of fact there are more investments from Qatar flowing into the UK than into France; and there are more investments from the UAE flowing into France than from Qatar.

To what point that urban myth clouds judgement is your statement. We all know that QR is a member of oneworld now and seeks to strengthen its ties with oneworld (for what it's worth they even announced flying Doha-Philadelphia nonstop). We also all know that Etihad - from the UAE - has started a partnership with AF. So with QR looking elsewhere and with EY already having started a partnership with AF it is more likely that money will come from the UAE than from Qatar.

Topic: RE: Air France-KLM Post Massive Loss
Username: mercure1
Posted 2013-05-06 09:41:36 and read 5550 times.

Air France shares drop significantly on Monday when government said it could sell portion of its remaining 16% share in the company.

Move could be part of broader effort of raise capital by government to counter budgetary deficit.

article
http://www.globalpost.com/dispatch/n...mpanies-hit-government-sale-talk-0

Topic: RE: Air France-KLM Post Massive Loss
Username: VV701
Posted 2013-05-06 17:06:28 and read 5198 times.

Quoting mercure1 (Reply 65):
Air France shares drop significantly on Monday when government said it could sell portion of its remaining 16% share in the company.

Unfortunately for the tax payer, socialist governments apparently do not understand the markets. They announce a plan to sell an asset and are then surprised when the price of what they are planning to sell immediately drops.

Back in May 1999 the British government announced a plan to sell a significant proportion of the UK's gold reserves preferring to invest in the "greater stability" of foreign currencies. The world price of gold immediately dropped by around 10 per cent. Nevertheless the UK auctioned 395 tons of gold over the following nine months at an average price of around US $275 an ounce. They netted around US $3.5 billion. Today those 395 tons are worth more than US $18.5 billion.

So the French Socialist Government and their plan to possibly divest their tax payers' investment in AF-KL are treading a well worn path.

Topic: RE: Air France-KLM Post Massive Loss
Username: abrelosojos
Posted 2013-05-07 00:01:33 and read 4992 times.

Bigger question is, why are people shocked by these results?

Until now, I still have not seen a credible plan to return to profitability. And all the markets where they pillaged consumers with high fares and bad service (read: Africa), are developing new/better options.

Hire someone dramatic (a non-Frenchman perhaps?) and arrest the decline that seems to be symbolic of the larger nation it represents.

Saludos,
Alex

PS: On a separate note, I just had my first AF flight in 4 years ... trip report coming up  .

Topic: RE: Air France-KLM Post Massive Loss
Username: LifelinerOne
Posted 2013-05-07 01:04:38 and read 4917 times.

Quoting mercure1 (Reply 65):
Air France shares drop significantly on Monday when government said it could sell portion of its remaining 16% share in the company.

Well, when they have sold their shares, they could move their AF-KLM HQ to The Netherlands... No political pressure anymore  
Quoting airproxx (Reply 21):
A study for the SNPL showed that if AF moved its headquarters in Holland, the savings on taxes would be about 700 to 800 million €!

Cheers!   

Topic: RE: Air France-KLM Post Massive Loss
Username: r2rho
Posted 2013-05-07 05:24:32 and read 4624 times.

Quoting blueflyer (Reply 18):
The net loss is essentially due to a €250 millions write-down in the value of fuel hedges and foreign currencies. Adjusted operating result is up over last year's, when despite posting a bigger adjusted loss for the first quarter, the group ended with a (tiny) adjusted profit of €25 millions at the end of 2012.

Thank you for bringing some intelligent perspective into this. Excessive fixation/obsession on quarterly results and failure to see the big picture is IMO one of the reasons behind the current economic crisis.

Quoting BA0197 (Reply 6):
They need to close down their regions and focus on business routes with high yield.

No - they need to win back the regions which U2 has taken from them. People are no longer willing to pay high fares to fly via CDG when U2 will fly them cheaper nonstop. And U2 has shown that there is more market in France than only Paris, something CDG-centric AF took far too long to realize (if at all). But they cannot fight back with the current cost base. So they need to do what IB has done with VY or LH is starting to do with 4U.

Quoting LAXintl (Reply 16):
- Regional ops massive loss making and just put under Hop brand - results TBA

No results to be expected in the short term as the changes for now are mainly cosmetic, but hopefully for the future. Integrating the regional ops was a necessarty and long overdue move.

Quoting LAXintl (Reply 16):
- Large legacy corporate overhead

  

Quoting LAXintl (Reply 16):
- Main hub Paris split into two airports

I don't think it's a huge issue. Paris is a huge market and both airports have good reasons to exist side-by-side, and AF has managed reasonably well to split O&D and hub ops between the two. There are some inefficiencies implied but IMO it's not a contributor to AF's losses. Furthermore, consolidating AF ops in Paris would require an airport the size of the future IST - ain't gonna happen, so AF has to live with that and run its business accordingly.

Quoting IndianicWorld (Reply 17):

Transavia likely needs to be used more aggressively in such markets as the regional bases,

In principle yes, but the airline should be rebranded, awareness about it massively increased, and cost base somewhat further reduced. Then start a VY or 4U type operation out of the regions.

Quoting Aesma (Reply 53):
I think the current idea is for people to stay in the dark about the ownership of Transavia, having Transavia only to balance the books and keep the other LCCs honest, AF doesn't want any association with the LCC image.

This is my impression as well. LH also used to think that way with 4U but is now changing its mind. IB led the way with VY, which they were never "ashamed" of owning and which they have actively integrated into the group.

Quoting kl838 (Reply 23):
their new terminal in CDG is a big improvement and was desperately needed. Many people I know avoid Air France because of CDG, and I must say that the experience transferring through 2E and F is much easier and not a hell hole when it was spread out between 3 or 4 terminals.

Count me among those who avoided CDG and have noticed that improvement recently. But it will take time to raise awareness about this and win back the lost passengers.

Topic: RE: Air France-KLM Post Massive Loss
Username: lightsaber
Posted 2013-05-07 06:09:23 and read 4541 times.

Wow... I just have to say wow.

Quoting BA0197 (Reply 6):
AF must act radically. This cannot continue.

   But can they?

Quoting MasseyBrown (Reply 10):
AF/KL is one of France's "too big to fail" companies. They'll survive one way or another.

Then France's bond rating takes a hit. Which means further austerity.

Quoting LAXintl (Reply 16):
- Main hub Paris split into two airports

This is one 'fix' that could really turn around AF. But could CDG add enough ground transportation and airside capacity to merge the two hubs? Doing so would provide a tremendous connection advantage and revenue surge.

Unlikely though. They'll wait and delay long after the new IST airport.  
Quoting blueflyer (Reply 18):
The net loss is essentially due to a €250 millions write-down in the value of fuel hedges and foreign currencies.

One still has to pay for fuel. Somewhere AF too a gain on fuel hedges that since 'went away.'

Quoting blueflyer (Reply 18):
it would be hard to extract more concessions from the unions

Then write off AF or somehow get their overhead down.

Quoting blueflyer (Reply 18):
With over €4 billions in cash, another €1.85 billions in available credit lines and a positive cash flow for the quarter, this can continue for a while...

Just enough for a US style BK.  
Quoting readytotaxi (Reply 37):

The situation with AF is similar to re-arranging the deck chairs on the Titanic, you know its gonna happen.

Unfortunately so due to France's declining economic condition. No surprise. Would you start a business in France today with the tax rates?

Lightsaber

Topic: RE: Air France-KLM Post Massive Loss
Username: jumpjets
Posted 2013-05-07 06:57:51 and read 4481 times.

Before we write off AF/KLM as a basket case we should put their losses in context. Lufthansa have also reported hefty losses for their first quarter of 459m Euro - which whilst not at the same level as AF/KLM is a reflection of the tough times the major European legacy carriers are having. IAG report their results in a few days, at which time we can compare all 3 European majors.

Topic: RE: Air France-KLM Post Massive Loss
Username: mercure1
Posted 2013-05-09 14:44:58 and read 4005 times.

In the news that financial analyst have reduced the outlook on Air France group.

They pretty much say the same as some people here, that the opaque and rather timid actions in the roll out of its 2015 Transformation plan are not expected to produce the promised results within the time frame in light of the continued airline sector market difficulty.

Basically they say AF-KL must push through much more vigorous and well defined focused concepts to achieve 2015 targets.

Topic: RE: Air France-KLM Post Massive Loss
Username: LAXintl
Posted 2013-05-09 14:57:38 and read 3988 times.

Unfortunately France is not exactly the place to push through "vigorous" corporate changes, especially if they involve any effects on labor.

I suspect AF will simply stumble along, a few changes at the edges, however nothing major to address its structural handicaps in fear of rocking the boat too much.

Topic: RE: Air France-KLM Post Massive Loss
Username: Aesma
Posted 2013-05-09 15:11:56 and read 3960 times.

Quoting mozart (Reply 64):
That is a urban myth, repeated all over France. As a matter of fact there are more investments from Qatar flowing into the UK than into France; and there are more investments from the UAE flowing into France than from Qatar.

To what point that urban myth clouds judgement is your statement. We all know that QR is a member of oneworld now and seeks to strengthen its ties with oneworld (for what it's worth they even announced flying Doha-Philadelphia nonstop). We also all know that Etihad - from the UAE - has started a partnership with AF. So with QR looking elsewhere and with EY already having started a partnership with AF it is more likely that money will come from the UAE than from Qatar.

Well the myth has some truth behind it, with Sarkozy being very friendly with Qatar, helping them buy the world cup, things like that. That the results are not that impressive investment wise is not really surprising, he was also courting Qaddafi and Assad at one point...

Quoting VV701 (Reply 66):
Unfortunately for the tax payer, socialist governments apparently do not understand the markets. They announce a plan to sell an asset and are then surprised when the price of what they are planning to sell immediately drops.
Quoting VV701 (Reply 66):
So the French Socialist Government and their plan to possibly divest their tax payers' investment in AF-KL are treading a well worn path.

Well they have no choice but announce the selling beforehand, in fact even big investors have to do this. For gold I don't know. And there is nothing socialist about selling publicly owned companies, in fact both the markets and the right are happy right now, while the left is appalled.

I'm not convinced AF will be sold though, that would probably be too unprofitable while a political hot potato, rather energy companies will see the state's participation reduced, they're worth a lot, but of course they also bring benefits so it's not that smart to sell.

Topic: RE: Air France-KLM Post Massive Loss
Username: jumpjets
Posted 2013-05-10 03:11:58 and read 3737 times.

Now we have the full set of results - IAG today posted an operating loss of 278m Euro and a post tax loss of 630m Euro for the first quarter.

The huge gap between operating and post-tax loss is predominantly caused by 'one off' provisions relating to the restructuring of IB and costs associated with standing down aircraft. Stripping out these one off exceptional items the loss for the quarter is 319m Euro.

So there we have it, all three major European legacy groups reporting huge losses - whilst AF/KLM might have the biggest operating loss of the three they are by no means on their own in this.

[Edited 2013-05-10 03:15:44]

[Edited 2013-05-10 03:16:03]

[Edited 2013-05-10 03:25:02]

Topic: RE: Air France-KLM Post Massive Loss
Username: LAXintl
Posted 2013-05-11 12:44:30 and read 3163 times.

Quoting jumpjets (Reply 75):
So there we have it, all three major European legacy groups reporting huge losses - whilst AF/KLM might have the biggest operating loss of the three they are by no means on their own in this.

Yes like I said earlier, its not the best time to be a European legacy carrier these days.

However AFKL performance was by far the worst of the bunch, and the one that where the most hard decisions still need to be made at.
LH seems to have a clear focus on its plans, while IAG was largely bogged down by the ongoing blood letting at IB.

Topic: RE: Air France-KLM Post Massive Loss
Username: Prost
Posted 2013-05-11 23:57:17 and read 2933 times.

Do amy of the three large legacies have reasonable path to prosperity? Or are they all hoping that the European economies just turn around?


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