Air France-KLM remains heavily in the red despite halving its net losses in 2013, but forecasts a “return to the path of profitable growth in 2014.”
The Franco-Dutch group turned in net losses of €349 million ($478 million), a considerable improvement on 2012’s deficit of €696 million, on revenue that was 0.4% higher at €25.5 billion.
ASKs grew 1.6% to 272.4 billion, while RPKs were up 2.4% to 228.3 billion. Load factor for the group stood at 83.8%, up 0.6 point on 2012.
Long-haul represented 81% of the group’s traffic and 79% of capacity, with traffic up 2.5% and capacity up 2.4%, respectively. Medium-haul, which has been a long-standing problem for Air France in particular, showed a 1.7% rise in traffic and 1.2% reduction in capacity, raising load factor 2.2 points to 76.8%—“a clear indication of the positive effects of Transform 2015,” the Group said.
Cargo continued to suffer from weak global trade flows and overcapacity. Full-year revenues dropped 7.9% to €2.82 billion. To cope, the group reduced its full freighter capacity 11.5%, compared to an initial planned reduction of 6%. However, due to an increase in belly capacity in the passenger fleet, the overall drop in freight capacity was just 2.7%. Traffic dipped 4.6%, leading to a 1.3 point drop in cargo load factor to 63.2%.
Low-cost subsidiary Transavia turned in a €23 million loss, compared to breakeven last time—the result of political unrest in some of its Mediterranean destinations plus launch costs of new routes.
“2013 marked an important stage in the Group’s turnaround,” chairman Alexandre de Juniac said in a statement. “We are clearly benefiting from the successful implementation of new working conditions and of the industrial plans adopted in all our businesses. As a result, we returned to a positive operating result despite the persistently challenging environment, generated robust free cash flow and reduced debt beyond initial targets. The additional measures announced in October 2013 are being implemented in medium-haul and cargo, and will start to bear fruit in the second half.
“While continuing to focus on strict cost discipline, we are also preparing the group’s future, with a major product upgrade at both Air France and KLM, the ongoing adaptation of our medium-haul offer and the strengthening of our long-haul network. The Air France-KLM Group is undergoing a profound transformation, and I am confident we will return to the path of profitable progress in 2014 and beyond,” de Juniac said.