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Health crisis: how Air France is coping

2021-02-11T20:28:09.632Z


The company, saved for the first time thanks to a loan guaranteed by the record State, hopes for a recapitalization subject to the green light from Brussels


It is not a crash but a severe stall.

Air France has seen its activity and its revenues collapse with the pandemic.

In January, the French air champion posted 45% of his flight program.

Since February and the new restrictions, the figure has fallen to 40%.

Africa and the overseas territories, two areas that had resisted well thanks to family visits and tourism, have faltered in turn.

The "compelling motive" melted the traffic.

Result?

Fewer flights, and fewer passengers on airplanes.

The filling rate - not communicated - is low, and in turn the recipes are bad.

The company prides itself on "continuing to serve 80% of its range of destinations", but it adjusts its flight schedule every week.

All the devices that fly are profitable, but a lot thanks to the cargo in the holds.

"Ten million euros are burned every day"

On the staff side too, Air France is tightening its belt.

The company plans 7,500 job cuts by the end of 2022 across the entire group, through unreplaced natural departures and voluntary departures.

Less payroll, but the debt hole has already been dug.

That of the group amounted to 9.3 billion euros at the end of September.

The State has come to its aid, with the payment of a record guaranteed loan, amounting to 7 billion euros.

An infusion of fresh money, but the bleeding is not stopped.

"Ten million euros are burned every day, linked to incompressible costs," sighs an executive, while the group will present its results on February 18.

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The next decisive step is the recapitalization.

Negotiations are progressing between Brussels, Paris and Amsterdam.

But the Commission demanded that Air France give up many take-off and landing slots at French airports in exchange for new public aid. Those from Orly, in particular, are highly coveted because their number is capped.

The future of the national champion looks bleak, especially as profound changes are underway.

This Thursday, Barbara Pompili announced the cancellation of the fourth terminal project (T4) at Roissy-Charles-de-Gaulle airport.

Several domestic flights have not resumed since the first containment

This no longer corresponds "to the requirements of a rapidly changing sector, turned towards the green aircraft of tomorrow", argued the Minister of Ecological Transition in an interview with Le Monde.

At the same time, the climate bill provides for the elimination of connections that can be made by train in less than 2.5 hours.

Air France Orly-Nantes, Orly-Bordeaux and Orly-Lyon flights have not resumed since the first confinement.

Does Air France see its horizon blocked?

No, retorts the company.

Most of the companies, moreover, had no expectations on the T4 project, but rather on a modernization of the conditions of reception of the customers.

The climate law, for its part, will have a limited impact.

The text excludes lines such as Paris-Nice, Paris-Marseille or Paris-Toulouse, as well as all connecting flights to international flights.

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In short, Air France believes in its future.

This is evidenced by the very good aircraft fill rate this summer and at Christmas, when the restrictions were lifted.

The company has also maintained its investments in the renewal of its fleet.

Source: leparis

All business articles on 2021-02-11

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