Air France-KLM Eyes Breakeven After Record Loss

Titlu : Air France-KLM Eyes Breakeven After Record Loss
Sursa : http://news.airwise.com/story/view/1274314651.html
Autor : Reuters
Data : 20.05.2010

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Air France-KLM predicted a return to breakeven despite the ash crisis in its just-started fiscal year after record losses for the 12 months to March 31, which ended on a note of economic recovery.

The Franco-Dutch airline group confirmed its outlook for 2010/11 but scrapped its dividend after a year dominated by the global financial crisis and last June's Atlantic jet disaster.

It posted an operating loss of EUR€1.285 billion euros (USD$1.6 billion) or EUR€3.5 million a day for 2009/10 and said it expected to break even in the current year, excluding the impact of unfavourable fuel hedges taken out before 2009.

The prediction is subject to the definitive cost of last months' closure of European airspace which hit operating income by an estimated EUR€160 million in the current quarter.

As with many airlines just emerging from a punishing industry-wide recession, the 2009/10 loss was far steeper than the EUR€186 million deficit seen the year before.

Revenues dropped 15 percent to EUR€20.994 billion.

Air France-KLM said its priority was to "control costs via headcount reduction" and to boost its unit revenues by holding the growth in capacity, or the number of seats on offer adjusted for the distance flown, to 1 percent.

Unit costs rose 4.9 percent in 2009/10 or only 1 percent after stripping out currency fluctuations and fuel prices.

The company said revenue trends were positive in both premium and economy cabins in the fourth quarter, growing on average by 2.7 percent.

The fiscal fourth quarter ended two weeks before ash from the mid-April eruption of an Icelandic volcano forced Europe to close many of its airports, resulting in a total of USD$1.7 billion of estimated revenue losses for airlines worldwide.

Air France-KLM said it was in negotiations over possible compensation from European authorities over the shutdown.

Rival Lufthansa last week confirmed its 2010 outlook after reporting worse-than-expected first-quarter earnings for the 2010 calendar year.