Ravaged like the entire aviation sector by the Covid-19, Air France-KLM is expected to publish abysmal losses for 2020 on Thursday, when the conditions for a necessary recapitalization are being negotiated in Brussels and against the backdrop of a still unclear recovery in traffic.
Read also: Behind the scenes of Air France, a company affected by the Covid-19
Over the first three quarters, the cumulative net loss of the Franco-Dutch group already reached more than 6 billion euros, and analyst forecasts compiled by Factset and Bloomberg see them at more than 7 billion for the year.
The health crisis deprived Air France-KLM of two-thirds of its passengers (104 million in 2019).
The 2020 turnover is expected around 11 billion euros by analysts, against 27.2 billion in 2019.
Despite drastic savings, notably through workforce reductions, Air France "
burns
" another 10 million euros per day, its managing director Anne Rigail had indicated at the end of 2020.
His case is not isolated.
Airlines, whose profitability depends on their ability to fly as many full aircraft as possible, suffered cumulative losses of $ 370 billion last year, according to the International Civil Aviation Organization.
From the start of the crisis, the French and Dutch governments came to the company's rescue, with direct or guaranteed loans exceeding € 10 billion, averting the immediate threat of bankruptcy.
On the other hand, warned the CEO of Air France-KLM Benjamin Smith on February 4 in an interview with L'Express, "
we cannot guarantee anything 100% and the support of France and the Netherlands is not a blank check
”.
Net debt of around 13 billion euros
The loans should be able to hold out at least until the end of the year.
But Benjamin Smith conceded that it would be "
difficult
" to repay them, "
in the short term as in the medium term
".
The still uncertain recovery, at the mercy in particular of the vaccination rate and the progression of the Covid-19 variants, makes recovery prognoses difficult.
The industry expects not to return to 2019 traffic until 2024, globally.
In the immediate future, Air France-KLM will have to face the question of its debt, warns Yan Derocles, analyst at Oddo BHF Securities.
"
We are on amounts that are not bearable for this company compared to its capacity to generate cash
."
“
2020 will close with an amount of net debt of around 13 billion whereas, in the past, this company approached in the very good years 700 million euros of generation of cash, we can see the number of years that “it will take to resolve this debt issue
,” he told AFP.
Hence the idea of recapitalization, which would involve the conversion of part of the debt contracted with the States.
The amount circulating is around four billion euros.
To validate this arrangement in the coming weeks, the European Commission, guardian of fair competition, would however require Air France to give up landing and take-off slots at Paris Orly airport.
Capped in a saturated installation, they are highly coveted in particular by "low cost" like the number one European Ryanair.
German competitor Lufthansa had been asked the same quid pro quo for a recapitalization last year.
Read also: Air France-KLM is considering a recapitalization
This requirement bristles both the management of Air France-KLM and the unions, Orly appearing at the heart of the group's strategy to win back, which wants to develop its “low cost” Transavia in France.
"
We would not understand that we are being imposed drastic measures, which would weaken our position in Paris,
" said Benjamin Smith.
It is "
out of the question
" that the group "
finds itself burdened in competitiveness
", added the Minister for Transport, Jean-Baptiste Djebbari, while FO, Air France's leading union, denounced a "
revolting
"
project
and "
ubuesque
”.
