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mercure1
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Air France-KLM Post Massive Loss

Fri May 03, 2013 11:59 pm

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)
 
rwy04lga
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 12:13 am

€630 million = $825,867,000  Wow!
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PEK777
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 12:26 am

Ouch

  
 
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LAXintl
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 1:09 am

Not a good time to be a European legacy airline.
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mercure1
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 2:17 am

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
 
skipness1E
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 2:30 am

Isn't KLM profitable and AirFrance a basket case?
 
BA0197
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 2:33 am

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.
 
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 3:14 am

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?
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deltal1011man
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 3:18 am

Quoting Byrdluvs747 (Reply 7):

And re-branding is going to fix it?
Good plan. I'm sure that will wrok  
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FlyingSicilian
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 3:27 am

Good to hear they want to buy Alitalia too. That will help...
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masseybrown
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 3:30 am

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.
 
IndianicWorld
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 3:55 am

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]
 
questions
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 4:14 am

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?
 
anstar
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 4:22 am

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.
 
Byrdluvs747
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 5:02 am

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.
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BestWestern
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 5:09 am

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.
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LAXintl
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 6:04 am

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]
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IndianicWorld
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 6:54 am

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.
 
blueflyer
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 7:19 am

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]
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AWACSooner
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 8:15 am

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...
 
SR4ever
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 8:34 am

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]
 
airproxx
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 11:02 am

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.
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Vio
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 12:05 pm

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.
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kl838
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 12:48 pm

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.
 
airproxx
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 1:17 pm

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
If you can meet with triumph and disaster, and treat those two impostors just the same
 
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Aesma
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 1:23 pm

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...
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Polot
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 1:56 pm

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.
 
kl838
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 1:57 pm

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.
 
PHX787
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 2:31 pm

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)
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airproxx
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 2:40 pm

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.
If you can meet with triumph and disaster, and treat those two impostors just the same
 
airproxx
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 2:41 pm

Quoting PHX787 (Reply 28):

Hollande is pissing a lot of people off

This is correct !
If you can meet with triumph and disaster, and treat those two impostors just the same
 
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LAXintl
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 2:57 pm

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

=
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timboflier215
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 3:02 pm

Didn't LH also post a similar loss for Q1? Not sure if this loss is reason enough to push the panic button....
 
airproxx
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 3:08 pm

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
If you can meet with triumph and disaster, and treat those two impostors just the same
 
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Aesma
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 3:09 pm

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.
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Polot
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 3:38 pm

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.
 
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Aesma
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 3:46 pm

Well the European legacies haven't been in bankruptcy recently.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
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readytotaxi
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 3:56 pm

The situation with AF is similar to re-arranging the deck chairs on the Titanic, you know its gonna happen.     
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Polot
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 3:59 pm

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.
 
timboflier215
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 4:12 pm

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?
 
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LAXintl
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 4:20 pm

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.
From the desert to the sea, to all of Southern California
 
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Polot
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 4:21 pm

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.
 
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mercure1
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 4:51 pm

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.
 
airproxx
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 6:06 pm

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..
If you can meet with triumph and disaster, and treat those two impostors just the same
 
ewr767
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 6:33 pm

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
 
FURUREFA
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 6:59 pm

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.
 
masseybrown
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 7:06 pm

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.
 
airproxx
Posts: 406
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 7:30 pm

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?
If you can meet with triumph and disaster, and treat those two impostors just the same
 
lehovec
Posts: 259
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 8:15 pm

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.
 
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mercure1
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RE: Air France-KLM Post Massive Loss

Sat May 04, 2013 8:18 pm

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.

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