Thu, 2016-02-18 10:25
Air France-KLM recorded a profit of €118 million ($130.8 million) for 2015, reversed from a loss of €225 million for the preceding year. Turnover was €26.1 billion, up 4.6% on 2014’s €24.9 billion.
Announcing the results in Paris, the Franco-Dutch company said the 4Q results were affected by the November terrorist attacks in Paris, which were estimated to have cost the company €120 million as customers stayed away from the French capital in the aftermath of the attack.
Operating costs rose by 0.8% year-on-year, with the rise ex-fuel reaching 3.5%. Fuel costs in 2015 accounted for €6.2 billion, down 6.7% because of the company’s fuel hedging policy. Fuel hedging levels will drop from 63% to 54% over the course of 2016. They are then due to decline sharply over the course of 2017 to just 10% by the end of that year, which will give the group considerable savings, assuming the cost of fuel remains low.
The profit figure was boosted by the group’s share of sales in Amadeus (€218 million) and of several slot pairs at London Heathrow (€230 million), but negatively affected by the change in value of the hedging portfolio (-€225 million), unrealized foreign exchange losses (-€360 million) and restructuring costs (-€159 million). The group added that it had maintained strict capacity discipline throughout 2015, with an increase of just 0.7%.
RASK “remained volatile,” but saw an increase of 2%. However, there was downward pressure on unit revenues (excluding currency), with large drops in demand from Brazil and Japan; those markets together account for 10% of total capacity.
The depressed oil prices also led to oil- and gas-related customers reducing their travel budgets, particularly to Africa.
Cargo activities continued to be loss-making at -€42 million, but improved over 2014’s figure of -€97 million. Five dedicated freighters were phased out during 2015, with full-freighter capacity dropping 23.3% and the group plans to operate just five freighters by this summer. This reduction should allow the cargo operation to return to an operating breakeven in 2017.
Low-cost carrier (LCC) subsidiary Transavia continued to do well, with passenger numbers rising 9% to 10.8 million and the Netherlands-originating LCC is continuing to ramp up its activities in France to combat the activities of LCC rivals such as Ryanair and EasyJet.
There was a sharp improvement in third-party maintenance revenues, which rose 26.1% to €1.58 billion over the year.
Net debt for the group dropped substantially, from €5.4 billion in 2014 to €4,3 billion last year.
Looking forward, most of the points in the Perform 2020 restructuring plan have been achieved, said the group, although negotiation of productivity agreements with some French staff remained to be concluded and the planned 1.5% reduction in costs for 2015 was not met, with only a cut of 0.6% recorded.