AF-KLM takings down 40 per cent

AIR France-KLM (AF-KLM) Cargo revenue plummeted over 40 per cent in the second quarter ending 30 September to US$851 million from $1.4 billion last year. Cargo traffic fell 16.8 per cent on top of a 17.9 per cent cut in capacity. In terms of net profit the carrier lost $219 million compared to nearly $15 million profit the year before.This meant that AF-KLM as a whole made a $70 million operating loss for the quarter, down from a $583 million profit in the same period last year. Revenue fell 19 per cent to $8.3 billion. The carrier said that it is unlikely to now go into the red for at least another 18 months.Pierre-Henri Gourgeon, Air France-KLM chief executive, said the cargo division was suffering a “very big crisis” due to “extremely aggressive, sometimes desperate competition”.AF-KLM has now said that it will “rationalise” its freighter operations and optimise its bellyhold capacity, starting with winter season capacity being reduced by 15 per cent.Worst hit routes were those to Asia Pacific, which fell 27.7 per cent on a 32.7 per cent reduction in capacity, followed by those to the Americas, which were down 13.4 per cent on a 12.1 per cent cut in capacity.In addition to freighter rationalisation AF-KLM is planning to cut 1,700 jobs next yearGourgeon commented on the news: “Lack of visibility over the timing and strength of the economic recovery means we must pursue our efforts in terms of cost reduction.”

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