Air France-KLM boosts quarterly profit as focus shifts to growth

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Air France-KLM boosted operating profit to €238 million ($321 million) in the second quarter, from €84 million a year ago, despite revenue declining 1.2% to €6.45 billion.

The result meant the airline group cut its first-half operating loss from €448 million to €207 million, on revenue down 1.8% at €12 billion.

"Despite a tough operating environment, the Air France-KLM Group maintained the momentum of its recovering in the first half of 2014, by halving its operating loss," says chief executive Alexandre de Juniac.

"Our results are consistently reflecting the benefits of the productivity measures implemented under Transform 2015," he adds, referencing the group's cost-cutting programme.

Transform 2015, says de Juniac, will be completed "in a few months", and is to be succeeded by a growth-focused 'Perform 2020' plan, details of which are to be presented in September.

In the passenger business, second-quarter operating profit climbed from €96 million to €255 million, tightening the first-half loss from €351 million to €123 million..

The cargo operation's quarterly loss narrowed from €50 million to €45 million, contributing to contraction of the first-half loss from €100 million to €79 million.

Maintenance business meanwhile generated a quarterly profit of €30 million, down €7 million year-on-year, and a first-half profit of €52 million, down €5 million.

For leisure arm Transavia, a doubling of the quarterly loss to €6 million fed a €10 million rise in the first-half loss, to €64 million.

"Delivery on the Transform 2015 plan is fully on track," says Air France-KLM, but it adds: "The operating environment remains tough, with industry overcapacity on certain long-haul routes, notably North America and Asia, impacting yields.

"This trend comes on top of the persistently weak cargo demand and the challenging situation in Venezuela."