Air France-KLM’s cargo cold-shoulder
12 / 09 / 2011
THE addition of at least six new routes this year using dedicated freighters and belly capacity has left Air France KLM feeling empty.
On the back of poor August results, registering a 0.2 per cent year-on-year fall, the carrier looks to go cargo cold turkey as it vies to compete with the likes of Lufthansa and International Airlines Group on the passenger side.
Chief executive Pierre-Henri Gourgeon said the group is planning to abandon its position as a leading air cargo transporter as the business is “too cyclical”.
“We consider our first-quarter results to have been disappointing,” Gourgeon said. “We have noticed that our competitiveness is not on the level of that of our major European competitors.”
The group will not be changing its full-year target to achieve an operating profit, he said, adding that it would give an update on its cost plans in November when the airline publishes quarterly results.
Towering staff costs, tough competition and a mire of debt have seen the carrier plummet 55 per cent on the Paris SBF 120 index, the worst-performing stock this year.
The airline said about a third of its revenue is spent on staff costs, compared with around a quarter for Lufthansa and IAG.
Cent-saving Air France-KLM is unlikely to pass plans for a multi-billion dollar order for mid-sized aircraft to renew its fleet during its board meeting on 15 September.