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Air France in the face of the health crisis: losses that "make you dizzy"

2021-02-18T09:01:19.700Z


The airline Air France-KLM and the aircraft manufacturer Airbus publish their results for 2020 on Thursday. The shutdown of traffic has caused


The profitability of airlines depends on an equation, which the coronavirus has struck out of the possibilities: filling their planes and making them fly to the maximum.

Air France-KLM lost 7.1 billion euros and two thirds of its customers in 2020. The turnover collapsed by 59% compared to 2019, to 11.1 billion, the group said on Thursday in a press release.

These "unprecedented" losses and falls in activity, "these are orders of magnitude that make you dizzy", admitted the group's chief financial officer, Frédéric Gagey, during a press conference call.

The net loss is in line with the expectations of financial analysts.

It includes a restructuring provision of € 822 million, largely a consequence of the voluntary departure plans initiated by the group before the health crisis.

Still at 83,000 at the end of 2019, the workforce has shrunk by more than 10% in one year: 5,000 less at KLM and 3,600 at Air France.

"Plans underway will still support around 900 departures from KLM and around 4,900 from Air France", "essential" efforts to overcome the crisis, according to Frédéric Gagey.

The loss was inflated by a depreciation of the aircraft fleet of 672 million euros, due to the end of the operation of the wide-bodied Airbus A380, A340 and Boeing 747.

A 17-year leap back

And the group also suffered a "huge" loss of 595 million due to advance purchases of kerosene, a common operation for companies wishing to better plan their costs, but a bet that turned out to be the loser while oil, for lack of 'being burned, saw his classes collapse.

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Over the whole year, Air France-KLM lost 67.3% of passengers in 2019. In the fourth quarter, three out of four passengers even did not fly.

This trend will not be reversed this year, we can expect “a difficult first quarter of 2021” due to “tightened travel restrictions”.

Passenger transport capacity will only reach 40% of that of the same period of 2019. And for the rest, "the visibility on the recovery in demand is still limited".

All companies combined, air traffic last year jumped 17 years back, with 1.8 billion passengers in 2020, far from 4.5 billion in 2019, notes the Aviation Organization international civil (ICAO).

International traffic was the most affected (-75.6%) due to border closures and many airports.

Airbus also in the red

And if the planes don't fly, there's no point in ordering new ones.

This explains why the aircraft manufacturer Airbus, which also publishes its results on Thursday, lost 29% of its turnover last year and posts a net loss of 1.1 billion euros in 2020. The Last year, the aircraft manufacturer delivered 566 aircraft, a third less than the previous year, and plans to deliver an equivalent number in 2021, proof that the recovery will not be for this year.

"Many uncertainties remain for our industry in 2021, because the pandemic continues to impact our lives, our economies and our societies", explains, in the press release, the executive president Guillaume Faury, who specified that he would not propose dividend to shareholders for 2020.

Airbus could have generated an operating profit if it had not set aside 1.2 billion to finance its restructuring plan.

The aircraft manufacturer, which has reduced its production rates by nearly 40%, announced last June the elimination of 15,000 jobs, including 5,000 in France and 5,100 in Germany.

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However, the European aircraft manufacturer is doing better than its competitor Boeing.

The American giant suffered a loss of 11.9 billion dollars in 2020, weighed down by the setbacks of the 737 MAX and the delay of the first deliveries of the 777X at the end of 2023.

Source: leparis

All business articles on 2021-02-18

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