Air France-KLM's results were below target for the second quarter, says chief Alexandre de Juniac, despite the group achieving an operating profit for the first time in five years and substantially reducing losses.
"All in all results are improving; unfortunately, we still have significant losses," said de Juniac during the group's first half results briefing, in which it reported a reduction in second-quarter losses to €163 million ($216 million), from €897 million last year, and an operating profit of €79 million.
De Juniac says that quarterly revenues which grew 1.2% to €6.58 billion were still "below target at this stage". He also admits that turnaround of both the group's cargo businesses and Air France's short and medium-haul division are taking longer than anticipated - something the group will address with deeper restructuring measures to be announced in September.
Restructuring so far under the group's Transform 2015 programme, now at the halfway stage since launch in 2012, brought a 0.6% fall in quarterly employee costs, to €1.97 billion. The group says this mainly reflects a €45 million saving from a headcount reduction, which contributed to a 1.2% decline in the SkyTeam carrier's operating costs, as did a 7.7% drop in the fuel bill, to €1.74 billion, driven by an 8% decline in fuel price after hedging.
In the passenger business, there was an operating profit of €93 million, compared with a loss of €57 million last year, as a 3.2% rise in passenger traffic outpaced 2.6% growth in capacity to deliver a 0.5 percentage point increase in load factor. Passenger revenue climbed 0.6% to €5.16 billion.
However, in the group's cargo business, a 4.3% reduction in capacity during the quarter was exceeded by a 5.8% drop in traffic, leading to a one-point decline in load factor, to 63%.