MIAMI – Air France-KLM reports a net loss of nearly €1.5bn (US$1.8bn) for Q2 2021. While this worrying trend is common in the age of COVID-19, the airline group believes that the “first signs of recovery are visible.”
Though travel restrictions persist throughout the world, their intensity is waning, sparking a renewed interest in travel. Air France-KLM is most optimistic about the reopening of the North Atlantic to American travelers, a huge share of the international market for both airlines. 7 million passengers booked flights with Air France-KLM in the second quarter as well, a rise of 477% when compared to the same quarter last year.
Despite the losses accrued in Q2, Air France-KLM has seen a remarkable turnaround when compared to their state in 2020. The group recorded a €7.1bn loss (US$8.4bn) in 2020, as well as a 67% slump in bookings. The French and Dutch governments would need to step in, providing at least €9bn (US$10.6bn) to ensure the group could survive.
Air France-KLM’s success may be seen as a sign of a broad recovery within the airline industry as a whole, which has been devastated by travel restrictions and lockdowns around the world. Earlier this week, Boeing recorded their first net profits in almost two years, as jetliner deliveries and orders increased to match the return of air travel demand.
Comments from Air France-KLM CEO
“There’s a big travel appetite; where people can travel, they will travel,” said Air France-KLM CFO Steven Zaat. He reiterated, however, that air travel is still not back to pre-pandemic levels.
The airline group also did not provide capacity guidance for their fourth quarter, citing the uncertainty of the reopening of the North Atlantic for European citizens and future travel restrictions.
“Reciprocity of borders reopening and the acceleration of the vaccination rollout worldwide, especially in the context of the rise of the delta variant, will play a key role in maintaining this momentum,” said Air France-KLM CEO Benjamin Smith.
Smith’s statements mirror those of Boeing CEO Dave Calhoun, who has also expressed uncertainty around the rapidly spreading delta variant.
In an interview with CNBC’s Squawk on the Street, Calhoun referred to the delta variant as “not helpful.” He believes the variant won’t have a “severe” impact on air travel demand overall, but may delay the return of demand for wide-body jetliners.
Featured image: KLM PH-BHL Boeing 787-9 Dreamliner. Photo: Liam Funnell/Airways