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Crisis Saddles Air France-KLM With Red Numbers Again

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Air France-KLM continues to suffer from the corona crisis. The operating loss in the first quarter is expected to be 1.3 billion euros.

 

Especially the third corona wave and the restrictions that certain countries impose on air traffic are troubling the company. In particular, Air France-KLM CEO Ben Smith pointed to the strict measures imposed by the Netherlands.

Air France-KLM came up with preliminary figures because it agreed with the European Commission on additional financial support for Air France to get through the crisis.

According to the airline, the results were slightly better than expected, also because Air France-KLM succeeded in further reducing costs. In both France and the Netherlands, the staff have made a wage sacrifice, with the best-paid workers giving up to 20 percent in salary. Also, thousands of employees have said goodbye.

The long-awaited bailout package was the subject of sometimes tense talks between Air France-KLM’s largest shareholders, France and the Netherlands, and the European Commission, which demanded a set of conditions to address the competition concerns. Last year, governments granted the company a total of EUR 10.4 billion in direct loans and guarantees.

Air France-KLM expects a significant recovery in demand for air travel in the coming months and, in particular, at the beginning of the summer. In doing so, the company assumes that the accelerated vaccination campaigns’ positive effects in various countries may lead to less stringent restrictions on passenger transport in those countries.

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