Air France-KLM is considering further equity measures to strengthen its balance sheet after first-quarter operating losses deepened to €1.18 billion ($1.42 billion).

Group revenues of €2.2 billion for the three months ending March 2021 were down 55% on the same period last year, during which the pandemic impact was just starting to being felt. Passenger levels across the group were down 73% at under 5 million.

Air France-KLM

Source: Andrew Balcombe/

The operating loss of €1.18 billion marked a widening from €815 million for the same quarter last year. The group recorded an EBITDA loss of €621 milion for the first quarter and, in its outlook, projects an EBITDA loss in the same range for the second quarter.

Air France-KLM expects to operate about 50% of pre-crisis capacity levels in the second quarter, as it progressively ramps up capacity in line with the vaccination rollout in Europe. It hopes to lift capacity to between 55% and 65% of 2019 levels in the third quarter.

Air France-KLM group chief executive Ben Smith says: ”A year into the Covid crisis, lockdown measures and travel restrictions in our home markets and around the world continue to strongly impact the group’s activity. In this ever-challenging environment, the group has nevertheless shown its resilience, maintaining a strict control of its capacity and costs.

”The success of the first set of capital-strengthening measures, completed in April, allows us to look forward to the summer season with greater confidence, hoping that the progress of the vaccination roll-out worldwide and the implementation of travel passes will allow borders to re-open and traffic to recover. In the meantime, we have accelerated the implementation of our transformation plan to build a solid post-crisis model.”

A €4 billion recapitalisation, under which the French state doubled its stake in the airline group, took place in April.

”The Air France-KLM group continues to work on strengthening its balance sheet,” it says. ”Additional equity and quasi-equity measures are currently under consideration.”

It says extraordinary resolutions will be presented at its next annual general meeting aimed at giving the board flexibility to ”restore equity and initiate the gradual refinancing of state aid and restore leverage ratio”.

Air France-KLM says it had €8.5 billion of liquidity and credit lines at its disposal. ”This level can be considered comfortable, given the expected recovery in the summer, despite the cash requirements for 2021,” the group says.

Group chief financial officer Frederic Gagey will retire at the start of July, it adds. He will be succeeded by Air France chief financial officer Steven Zaat.