Air France KLM Cargo remains in the red

Air France KLM’s cargo business remained in the red during the first half of the year but the phasing out of freighters has helped improve performance compared with a year earlier.
The Franco-Dutch airline group’s first-half figures for the cargo business show an operating loss of €116m against a loss of €141m for the same period in 2015. Meanwhile, first-half cargo revenues were down 15.7% year-on-year to €1bn.

The improved result – although still a loss –was down to reduce costs as freight capacity was withdrawn and the number of full-time employees reduced by 8.1% compared with the first half of 2015.
The airline reported weak demand due to a challenging economic environment and ongoing structural overcapacity. Currency affects also had an impact on results.

The result comes as Air France KLM continues to restructure its cargo business, which includes a reduction in freighter capacity.
One MD-11 freighter was retired during the first quarter, and two more were phased out during the first week of July, reducing the total number of full freighters in operation to six.
“This reduction should enable the full-freighter business to return to operating breakeven in 2017,” the airline group said.
The operating result of the full-freighter business stood at a loss of €12m during the first six months of 2016, an improvement of €25m compared to the first half of 2015.

Overall, the airline reduce cargo capacity by 5.6% during the first half of the year to 6.9bn available tonne km.
As a result of “persistently weak demand”, volumes were down 7.5% to 4.1bn revenue tonne km.

Meanwhile, the overall airline reported that the recent terrorist attacks in France and Europe were having a negative effect on revenues.
Overall first-half revenues were down 2.6% year-on-year to €11.8bn, while it reported a net loss of €114m but operating profits were up 456% to €218m thanks to lower fuel costs.
The overall airline is also looking to reduce costs by renegotiating deals with crews and through a reduction in employee numbers.
A week-long strike by flight crews linked to the talks is due to start from July 27.

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