Air France KLM trims loss, warns of turbulence

Air France warned of doubts over fuel prices, some bloated routes and uncertainty over the economic and politics

Afp May 04, 2016

PARIS: Air France-KLM announced Wednesday it had trimmed losses in the first quarter of 2016 but the airline said passenger traffic to Paris had been affected by terror attacks in Europe and it warned of a difficult year ahead.

The Franco-Dutch group warned of doubts over fuel prices, some bloated routes and uncertainty over the economic and politics.

The carrier enjoyed lower fuel prices but said this was likely to be offset over the rest of the year by pressure on revenue and by the negative impact of currency swings.

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Air France-KLM reported a net loss of 155 million euros ($178 million) in the three-month period, which was overshadowed by a deadly attack on Brussels airport. The loss compared to a loss of 559 million euros in the same period a year earlier.

Revenue edged up 0.4 per cent to 5.6 billion euros in the same period.

"The global context in 2016 remains highly uncertain regarding fuel prices, the continuation of the overcapacity situation on several markets and the geopolitical and economic context in which we operate," Air France-KLM said in a statement.

"As a consequence, the group expects the forecasted savings on the fuel bill to be significantly offset in the coming quarters by unit revenue pressure and negative currency impacts."

The airline said it was sticking to its forecasts for this year, including cutting unit costs by around 1.0 per cent and a cutting its net debt -- now standing at 4.16 billion euros -- significantly.

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"Despite a difficult environment marked in particular by the Brussels attacks, the upgraded product offer, the commercial efforts and the ongoing network adaptation have enabled the group to limit the unit revenue decline and to retain a substantial part of the fuel savings," outgoing chief executive Alexandre de Juniac said in a statement.

Two suicide bombers struck Brussels airport on March 22, while a third attacker blew himself up at on a metro train. The twin attacks, which killed 31 people, came barely four months after the November 13 attacks in central Paris that killed 130 people.

Air France-KLM finance director Pierre-Francois Riolacci said traffic to Paris had been affected "terrorist events" especially for the Japanese market.


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