Considering they were sitting in front of slides that showed a business announcing annual losses of an eye-watering €1.5 billion I thought the top team of Air France-KLM looked remarkably upbeat at their annual press conference in Paris yesterday.
OK the figures were expected and when you’ve been living with charts that are plastered with red ink for so long, perhaps the impact of such a loss becomes dulled.
Air France-KLM chief executive Pierre-Henri Gourgeon (far left) said these results came in “the face of a brutal crisis”. His introduction was the only sign of nerves about the results as he skipped through the highlights to quickly hand over a more detailed description of the year to KLM head Peter Hartman (right).
The tall Dutchman said that it was “only an ash cloud that spoiled lots of our energy” as he ran over the measures the group is taking to restore its fortunes. The bill for the ash cloud to the group is currently running at lost revenues of €260 million by the way.
The journalists in the audience at the grand Academie Diplomatique in Paris were asking questions in batches of two or three at a time. “Thank you for your many questions,” said Gourgeon to one scribe with a note of slight exasperation.
His longest answer was about safety, as the crash of an Air France Airbus A330 in the South Atlantic remains high on the news agenda in France. Gourgeon also talked about the ash cloud issue, but not in the harsh terms of some of his counterparts in other airlines and in IATA.
On the Airbus A380, Gourgeon commented that it was “an excellent tool in this situation”.
And while Air France-KLM has been overtaken in revenue terms by the expanding Lufthansa Gourgeon is not overlying concerned. “Now it happens that they consolidate [the results] of bmi and Austrian.” Their losses have put a drag on Luftahnsa’s results. “One part of this is this negative effect is due to them,” he notes, adding, “and this is why we didn’t fight to the bitter end to buy Austrian”.
The Air France-KLM investment in Italian flag carrier Alitalia was going OK he said. “There is no need for us to question our investment in Alitalia.”
Further afield, Air France-KLM is keen on joint ventures in China. In late 2011 or early 2012 it will have in place a revenue and cost share JV with China Eastern, says Gourgeon. This is in addition to the launch of a JV between Air France and China Southern this winter. “There might be others later,” said Gourgeon, referring to ventures in China.
Overall the 2010 Air France-KLM press conference was a muted affair, much in line with the business climate. This big group has a big plan to turn itself around but it won’t be quick.