Network cuts and the weak international economy were factors in CityJet operating unprofitably last year, but writedown of an investment in VLM Airlines was the major cause of a €209 million ($289 million) net loss.
A charge of €175 million was attributed to the Belgian airline, which was acquired by Air France-KLM in 2008 and merged into the Irish regional carrier's operation. The VLM-related exceptional item compounded an operating loss of €21.3 million.
Additionally, the value of CityJet's owned Avro RJs – of which, Flightglobal's Ascend Online database shows, there are 10 – was written down by €7.3 million, and there was a charge of €3.2 million arising from a change programme.
The airline cites the loss of its Paris-Zurich franchise route and a London City-Milan wet-lease for Alitalia as factors in its €21.3 million operating loss. These represented a 10% decrease in activity for the full calendar year, it says.
Additionally, the operating result was hit by "continued weakness of the international economy affecting business travel", says CityJet, adding that "Eurozone GDP fell 0.5% in 2012, while UK GDP growth was also weak, increasing by 0.3%".
In the course of 2012, CityJet issues 180 million new €1 shares to Air France Finance. This allowed the company to repay €180m of short-term debt.
The airline says results for the year so far, to September, are "slightly better" than budgeted. "The forecast to year-end indicate that this trend will be maintained," it adds.
Air France-KLM has been seeking a buyer for loss-making CityJet.