Air France-KLM's restructuring has so far been insufficient and further measures will need to be taken to address financial problems at the group, admits chief executive Alexandre de Juniac.
He cites cargo operations and Air France's short- and medium-haul network as particular problem areas where there must be further restructuring.
De Juniac was speaking in Paris this morning at a half-year results briefing, in which the group reported a reduction in second-quarter losses to €163 million ($216 million) from €897 million last year.
Ruling out compulsory lay-offs, de Juniac says actions to be taken will include further voluntary redundancies and "commercial and industrial" measures. These are to be announced in September, after discussions with relevant stakeholders, and will likely be implemented at the start of 2014.
Air France-KLM is now at the halfway stage in the implementation of its Transform 2015 restructuring programme. De Junaic says that while more needs to be done, efforts to restructure its short- and medium-haul business are starting to bear fruit.
A strict reduction in capacity saw the French flag carrier reduce its Airbus A320 fleet to 119 aircraft from 135 in the summer of 2012. KLM meanwhile added more seats to its Boeing 737 narrowbodies and implemented shorter turnaround times.
De Juniac says that capacity was reduced in France and across Europe, leading to an improvement in short- and medium-haul operations. In France, the quarter's 4.8% reduction in capacity was accompanied by a 2.3% increase in revenue passenger-kilometres, and there was a 1.4% increase in revenue per available seat-kilometre (RASK).
In Air France-KLM's medium-haul network, there was a 1.7% decrease in capacity and 1.8% growth in RPKs, and RASK was up 0.7%.
In the group's cargo businesses, a further fall in traffic negated a lowering of capacity, including an 18% reduction in the use of full freighters, and revenue fell to €705 million from €764 million.