LONDON – The Board of Directors of Air France-KLM, chaired by Anne-Marie Couderc (70), met today to approve the financial statements for the First Half 2020 and review the acceleration of the Group transformation plan.

KLM Boeing 777-300ER PH-BVA Orange Pride in Amsterdam Schipol Airport (AMS). Photo: Alvin Man

Q2 2020 Results

The Covid-19 crisis severely impacted the Second quarter 2020 results:

  • Revenue at 1,182 million euros, down 5,839 million compared to last year
  • Operating result at –1,553 million euros, down 1,976 million euros compared to last year
  • EBITDA loss minimalized to an average of 260 million euros per month compared to an initial estimate of 400 million euros thanks to effective cash preservation and cost control measures
  • Net income at -2,612 million euros, including an impairment on Airbus 380 and 340 aircraft at respectively -520 and -72 million euros, Covid-19 related over-hedging at -105 million euros, and restructuring provision at -227 million euros
  • Net debt/EBITDA ratio at 4.8x, compared to 1.5x at the end of 2019

The French and the Dutch governments have provided financial packages with conditions attached to increase competitiveness and achieve sustainability objectives.

Thus at 30 June 2020 the Air France-KLM Group has 14.2 billion euros of liquidity or credit lines at its disposal to weather the crisis and restructure its business.

KLM Boeing 747-406M City Of Seoul PH-BFS at Los Angeles Tom Bradley Intl’ Airport (LAX). Photo: Andrea Ongaro @alphaoscaraviation

Air France-KLM Outlook

The Group has introduced stringent onboard sanitary measures and, supported by the ongoing “Travel with Confidence” campaign, has seen a slow recovery of leisure demand in June and July 2020.

The airlines of the Group are carefully increasing capacity for the summer months, wherein overall capacity levels are managed based on continuously scrutinizing developments in market demand and government policies, including the opening of borders and slot moratoriums.

The Group aims to rebuild its worldwide network step by step with a wide variety of destinations in the portfolio.

Nevertheless, there is limited visibility on the demand recovery curve as customer booking behavior is much more short-term oriented than before the Covid-19 crisis, especially on the Long Haul network.
On this basis the Group expects:

  • Capacity in Available Seat kilometers at index 45 for the third quarter 2020 and at index 65 for the fourth quarter 2020 compared to last year.
  • Negative load factor developments for the third quarter 2020, particularly on long-haul network, and anticipates negative yield mix effects due to a delayed recovery in business compared to leisure motive traffic.

The Group has further reduced its capital expenditure plan for 2020 by an additional -0.3 billion euros to 2.1 billion euros. This is a reduction of -1.5 billion euros compared to the initial 2020 guidance of 3.6 billion euros.

The Group foresees a significantly negative EBITDA in the second half year 2020.

Air France-KLM GroupSecond quarterHalf year
2020Change2020      Change
Passengers (thousands)1,217-95.6%19,328-61.7%
Passenger Unit revenue per ASK1 (€ cts)3.88-42.8%5.57-14.6%
Operating result (€m)-1,553-1,976-2,368-2,505
Net income – Group part (€m)-2,612-2,709-4,413-4,186
Adj. operating free cash flow (€m)-1,501-1,609-2,327-2,677
Net debt at end of period (€m)  7,9731,826
KLM Boeing 777-300ER PH-BVA. Photo: ©Alvin Man

Statement from Air France-KLM Board Of Director

Mr Benjamin Smith (CEO, 48) said: “The second quarter results demonstrate the unprecedented impact of the COVID-19 crisis on the activity of the Air France-KLM Group and of all airlines worldwide. The Group reported an operating loss of 1.5 billion euros for the quarter, with activity virtually at a standstill in April.”

“The cost reduction and liquidity preservation measures rapidly implemented have nevertheless enabled our operational losses to be reduced.”

“The exceptional support of the French and Dutch governments has provided Air France-KLM with the liquidity needed to weather the crisis and ensure a gradual recovery in business.”

“However, the uncertainties linked to the health situation, the opening of borders and the general economic situation are very strong. We must also adapt to important changes in customers’ behaviour.”

” This context pushes us to accelerate our transformation to improve our economic and environmental performance according to the main pillars of our strategic plan. I am confident in our ability to implement these projects with our teams in order to emerge from this exceptional crisis.”

KLM Boeing 777-300ER landing in Amsterdam Schipol Intl’ airport (AMS) Photo: Bram Steeman

Air France-KLM Business Review

Network: Skeleton network operation in April and May 2020, slow resumption of traffic in June 2020 after lockdown easing across Europe.

NetworkSecond quarterHalf year
constant currency
constant currency
Total revenues (€m)938-84.3%-84.4%5,216-53.1%-53.5%
Scheduled revenues (€m)827-85.5%-85.6%4,897-53.8%-54.1%
Operating result (€m)-1,123-1,438-1,436-1,852-1,906-1,933

Second quarter 2020 revenues decreased by 84.4% at constant currency to 938 million euros. The operating result amounted to -1,123 million euros, a -1,436 million euros decrease at constant currency compared to last year.

Measures are in place to preserve cash including reduction of investments, cost savings measures, deferral of supplier payments and partial activity for employees.

Air France KLM Tails Photo: Air France-KLM group

Air France-KLM Passengers Review

Passenger network: Skeleton operations to key cities in April and May, slow resumption of activity in June with reduced frequencies on a substantial part of the network routes.

Second quarterHalf year
Passenger network2020ChangeChange
constant currency
constant currency
Passengers (thousands)1,128-95.1%16,889-60.4%
Capacity (ASK m)8,765-88.4% 71,168-51.1% 
Traffic (RPK m)3,261-95.1% 53,109-58.3% 
Load factor 37.2%-51.4 pt 74.6%-12.9 pt 
Total passenger revenues (€m)372-93.2%-93.2%4,183-58.4%-58.6%
Scheduled passenger revenues (€m)335-93.6%-93.6%4,006-58.6%-58.9%
Unit revenue per ASK (€ cts)3.83-44.9%-45.1%5.63-15.4%-15.9%

The passenger network activity in April and May 2020 was, as anticipated due to the lock downs and travel restrictions, effectively reduced to a skeleton operation connecting our home markets to key cities and a number of routes with high cargo demand.

The slow resumption of traffic in June 2020 on the short and medium-haul networks was a result of lockdown easing’s across Europe.

For the second quarter 2020 the unit revenues were strongly down at -45.1% at constant currency compared to last year due to low load factors, partially offset by higher yields.

Since we introduced the refund policy, nearly 3 million direct sales requests have been processed (concerning flights cancelled since mid-March), representing nearly 90% of the volume of ongoing direct sales customer requests.

Requests from customers who have booked through travel agencies can now be made through the agencies (gradual opening by country).

To handle this exceptional volume of requests related to program adjustments, the size of the team in charge of reimbursements was multiplied by 10 at the height of the activity, reaching more than 600 people thanks to internal and external reinforcements to process our customers’ requests as quickly as possible.

Air France Airbus A380 Photo: Vincenzo Pace

Air France-KLM Cargo Review

Cargo: Strong Cargo yields due to gap between industry capacity and demand in the second quarter of 2020.

Second quarterHalf year
Cargo business2020ChangeChange
constant currency
constant currency
Tons (thousands)149-46.4%392-28.5%
Capacity (ATK m)1,581-56.3% 4,772-32.6% 
Traffic (RTK m)1,180-44.4% 3,013-27.7% 
Load factor 74.7%+16.0 pt 63.1%+4.3 pt 
Total Cargo revenues (€m)566+6.0%+5.2%1,032-4.5%-5.6%
Scheduled cargo revenues (€m)491+8.2%+7.4%890-4.0%-5.1%
Unit revenue per ATK (€ cts )31.06+147.6%+145.7%18.65+42.4%+40.8%

Global air cargo capacity is at the end of the second quarter 2020 approximately 27% lower than 2019 whereby industry air cargo load factors are the highest levels in past two years.

The Cargo capacity of the Group has been down 56.3%, primarily driven by the reduction in belly capacity of passenger aircraft, with load factors strongly up 16.0 points for the quarter. Unit revenue were strongly positive for the second quarter 2020 up 145.7% compared to last year at constant currency.

On the demand side, world-wide air freight volumes are down due to Covid-19 crisis but are expected to rebound to 90 to 95% of pre Covid-19 levels in 2021. The supply-demand gap of the past months is foreseen to narrow as industry capacity supply will increase.

Transavia Boeing 737-7K2 PH-XRD at AMS. Photo: ©Erben van der Lans @erbenvdlans

Transavia Numbers

Transavia operating loss in the second quarter of 2020 at -111 million euros, as fully impacted by the COVID-19 crisis.

Second quarterHalf year
Passengers (thousands)90-98.2%2,439-68.8%
Capacity (ASK m)277-97.1%5,169-66.3%
Traffic (RPK m)181-97.9%4,636-67.2%
Load factor 65.3%-26.7 pt89.7%-2.3 pt
Total passenger revenues (€m)17-96.6%259-65.0%
Unit revenue per ASK (€ cts)5.47+4.4%4.74-1.9%
Unit cost per ASK (€ cts)45.46+871.8%8.46+71.4%
Operating result (€m)-111-164-193-176

The second quarter operating result ended 164 million euros lower compared to last year at an operational loss of -111 million euros, as a result of the Covid-19 crisis.

Activity levels were close to zero in April and May 2020 with a progressive restart from early June, resulting in an activity level for the month of June 2020 of 8% compared to last year.

Strict cash preservation measures are in place including reduction of investments, cost savings measures, deferral of supplier payments and partial activity measures.

Air France Airbus A380-800 F-HPJD. Photo: Alvin Man

Air France-KLM Q2

Air France-KLM Group: Second quarter 2020 revenues down -83% and operating result down -1,976 million euros.

Second quarterHalf year
constant currency
constant currency
Capacity (ASK m)9,042-89.4%76,337-52.5% 
Traffic (RPK m)3,442-95.5%57,746-59.2%
Passenger unit revenue per ASK (€ cts)3.88-42.6%-42.8%5.57-14.0%-14.6%
Group unit revenue per ASK (€ cts)9.31+27.8%+27.3%6.73-4.5%-5.2%
Group unit cost per ASK (€ cts) at constant fuel26.48+290.1%+351.2%9.84+41.1%+40.9%
Revenues (€m)1,182-83.2%-83.3%6,201-52.2%-52.6%
EBITDA (€m)-780-1,947-1942-840-2,451-2,481
Operating result (€m)-1,553-1,976-1972-2,368-2,505-2,537
Operating margin (%)-131.4%-137.4 pt-137.3 pt-38.2%-39.2 pt-39.5 pt
Net income – Group part (€m)-2,612-2,709-4,413-4,186

2019 results restated for LLP componentization accounting change and EU passenger compensation reclassification between revenues and external expenses

In the Second quarter 2020, the Air France-KLM Group posted an operating result of -1,553 million euros, down by 1,976 million euros compared to last year.

Net income amounted to -2,612 million euros in the second quarter 2020, a decrease of 2,709 million euros compared to last year, of which exceptional accounting items due to Covid-19: impairment for acceleration phase-out Airbus 380 -520 million euros and Airbus 340s -72 million euros, fuel “over hedge” -105 million euros and a restructuring costs provision for the KLM voluntary departure plan of  -188 million euros and for Air France pilots Voluntary Departure Plan of – 37 million euros.

Fuel “over hedge” -105 million euros for the remainder of 2020:
As a result of capacity reductions compared to the end of March 2020 assumptions partly offset by higher fuel prices, the Group increased its position of over-hedging.

The change in fair value, initially recognized in equity, has been recycled to “Other financial income and expenses”

Currencies had a positive 55 million euro impact on revenues and a negative 59 million euro effect on costs including currency hedging in the second quarter of 2020.