Air France-KLM losses $1.1 billion

Air France-KLM losses $1.1 billion

PARIS - The Associated Press
Air France-KLM losses $1.1 billion

Air France’s CEO Alexandre de Juniac. AFP photo

Air France-KLM said yesterday its net loss ballooned to nearly 900 million euros ($1.1 billion) in the second quarter after it took a hefty charge to pay for restructuring that will see it shed
about 10 percent of the airline’s workforce.

The Franco-Dutch airline operator said its net loss grew to ?895 million in the three months to June 30, compared to a loss of 197 euros million a year earlier.

In a statement the airline said its accounts included a 368 million euro provision to pay for restructuring that is expected to eliminate 5,122 jobs out of a workforce of 49,301.

It expects “natural” attrition to produce 1,712 of the cuts, and then it plans to eliminate 2,056 ground staff, 904 cabin crew and 212 pilots.

Last month the airline said it was seeking voluntary changes in union contracts to avoid layoffs but that forced departures may not be avoidable.

The airline said “uncertain outlook” for the global economy and volatility in fuel prices and the euro currency “make forecasts for the latter part of the year difficult.”

European airlines are struggling to cope with high fuel prices and weak economic growth due to Europe’s financial crisis.

In May, Germany’s Deutsche Lufthansa said last month it would cut 3,500 administrative jobs to reduce costs after the German company lost $521 million in the first quarter.

Revenue up 4.5 percent
Air France-KLM’s revenue rose 4.5 percent to 6.5 billion euros in the second quarter, lifted by a 2.4 percent increase in passenger traffic, the company said.

Meanwhile, budget airline Ryanair reports a 29 percent fall in adjusted net profit in the three months ending June 30 because of higher fuel costs.

The airline reported yesterday that revenue was up 11 percent to 1.28 billion euros ($2 billion) in its first quarter but fuel costs were up by 27 percent.

The Dublin-based carrier said it expects traffic to grow by 7 percent in the current quarter but only by 1 percent between September and March.