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Air France-KLM Reports Second Quarter Net Loss of €1.5 Billion on 133% Increase in Revenue to €2.8B

Updated: Aug 1, 2021

The Air France-KLM Group has reported a second quarter 2021 net loss of €1.5 billion on a year-over-year increase in revenue of 133 percent to €2.8 billion. The quarterly loss includes a €849 million related to the derecognition o KLM’s ground staff pension fund.

Air France-KLM Group Reports Second Quarter 2021 Financial Results - Courtesy Air France-KLM

On Friday (July 30, 2021) Air France-KLM reported their second quarter financial results for the period ending June 30, 2021. The Group reported a second quarter net loss of €1.5 billion on a year-over-year increase in revenue of 133 percent to €2.8 billion. The net loss includes a negative amount of €849 million, primarily attributable to the derecognition of KLM’s ground staff pension fund and other non-current income and expenses. During the second quarter, the Group increased its capital by €1 billion, converted the French State loan of €3 billion into perpetual hybrid instruments, and issued a Senior bond for €800 million, of which the cash will be received in Q3. On June 30, 2021, Air France-KLM’s net debt totaled €8.3 billion, down €2.7 billion compared to December 31, 2020. Additionally, the Group’s restructuring programs showed improved results, with structural benefits increasing to €2.1 billion.

In Friday’s announcement, Air France KLM Group’s CEO, Mr. Benjamin Smith, said,

“Thanks to the easing of travel restrictions in several key regions, the Second quarter of 2021 saw the first signs of the long-awaited recovery. Travelers were able to take the skies again and Air France-KLM’s voluntarist approach in terms of capacities - combined with the Group’s balanced network and efficient hubs - proved conclusive.

Air France-KLM's Second Quarter 2021 Select Operating and Financial Results - Courtesy Air France-KLM

“Reciprocity of borders reopening and the acceleration of the vaccination roll-out worldwide, especially in the context of the rise of the Delta variant, will play a key role in maintaining this momentum. To make the most of the recovery and prepare for the future, Air France-KLM continued its transformation across all businesses and notably reinforced its sustainability efforts to lead the way to sustainable aviation.”

During the second quarter, Air France added three new Airbus A350-900s and KLM Cityhopper welcomed two new Embraer E195-E2s. also added nine aircraft during the first half (H1) of the year. Air France-KLM estimates that the Group’s fleet for 2022 will be seven percent smaller than in 2019, and the company expects to increase available seat kilometers (ASK) to 2019 levels by 2024.

Air France-KLM Group's Fleet at June 30, 2021 - Courtesy Air France-KLM

On June 30, 2021, the Group had €9.4 billion in liquidity and available credit lines. The company expects to report positive EBITDA for the third quarter of 2021. Net CAPEX for the year is expected to be below €2.0 billion, largely attributable to fleet investments. Compared to December 2019, KLM has reduced the number of full time equivalent (FTE) employees by 5,700, while Air France (excluding Transavia France) reduced their number of FTEs by 5,300. Through Air France’s voluntary departure plan, the airline expects an additional 3,200 employees to leave by the end of 2022. The reduction in FTEs is expected to drive unit costs down 8-10 percent once capacity returns to pre-pandemic levels.

Source: Air France-KLM


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