Air France-KLM half year results

ON A long flightpath to financial recovery, Air France/KLM grew its half-year 2014 group revenues by one per cent to €12bn, a statement reveals.
A strict capacity-management discipline is being used to balance supply and demand and improve productivity at the loss-making merged European carrier.
This strategy is particularly relevant to its cargo business, which is steadily moving away from owned-freighter commitments, with unspecified further reductions to full-freighter exposure in the pipeline, the report admits.
First-half 2014 cargo revenues amounted to €1,344m, down 4.3 per cent and by 1.6 per cent on a constant currency basis.
Cargo volume was stable with a 1.5 per cent reduction in capacity, leading to a single-point increase in load factor to 64 per cent.
In the period, cargo’s operating result improved by €21m to minus €79m.
“Faced with the slower-than-expected recovery of cargo demand, we will further decrease our full-freighter exposure, but will remain a key player in the cargo business,” insists Alexandre de Juniac, chairman.
The company’s cargo business, once one of the biggest global freight carriers, lost more than €200m last year amid a general slump in the market.
Martinair, founded in 1958 and wholly-owned by Air France-KLM since December 2008, has seven B747-400Fs, each able to carry about 110 tonnes, plus six MD-11Fs, each with a capacity of more than 80 tonnes.
Air France which, until recently had six freighters, found a buyer for two B747-400ERFs and is handing one back to lessors, leaving a dedicated three-aircraft fleet of two B777s and a single B747-400ERF.
Overall, in its outlook for the remainder of 2014, the carrier admits it is facing “a tough operating environment”.
 “Despite that environment, the Air France-KLM Group maintained the momentum of its recovery in the first half of 2014, by halving its operating loss,” the chairman adds.
“Quarter after quarter, our results are consistently reflecting the benefits of the productivity measures implemented.”
The airline says it is on track to reach a net debt target of €4.5bn next year.