Air France-KLM Group will spend approximately €400 million ($530 million) in aircraft related capital expenditures (capex) next year, compared with €700 million this year.
Chief financial officer Philippe Calavia said in the 2012 investor day last week that the group continues to adapt capex over a deteriorating macroeconomic environment.
As part of the €2 billion net reduction target that Air France has to achieve by December 2014, aircraft under operating leases will need to be at 33%, he says, rather than the current 40%. "As a consequence sale and leaseback activity will be limited," he adds.
Calavia plans aircraft sale and leaseback operations to account for less than €100 million per year over the next two years of its Transform 2015 programme and beyond.
Net debt totalled €6 billion at 30 September 2012 and the group targets €4.5 billion net debt by December 2014. "This would take us back to the levels of 2006," notes Calavia.
Air France-KLM will finance €4.25 billion debt maturities between 2012 and 2014 through a projected €2 billion free cash flow after investment. The group also plans to raise €1.75 billion in asset backed financings, of which €900 million were closed between January and September this year.
Air France-KLM also issued a €500 million bond earlier this month, which matures in 2018.