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Spinetta sees positive results from Air France-KLM restructuring

Air France-KLM chief executive Jean-Cyril Spinetta believes the group's restructuring programme is already having a positive impact on its financial performance as the SkyTeam carrier works to turn round losses.

Speaking at a half-year financial results announcement in Paris, Jean-Cyril Spinetta said it is clear the group is beginning to experience the "first significant positive results of Transform 2015". While the group's second quarter net losses deepened to €895 million ($1.1 billion) off the back of one-off restructuring costs, it narrowed operating losses to €66 million.

Spinetta says the group's "costs are shrinking due to Transform 2015 decision making" and envisages results in the second half of 2012 to be better than in 2011.

He says that Air France-KLM is also on course to achieve its Transform 2015 objective of reducing its debt by €2 billion in three years. The group's net debt fell by nearly €300 million in the first half of 2012 to approximately €6.2 billion.

Staff numbers for the carrier have declined 2.2% since June last year according to Spinetta and by 9% since June 2008. He says by the end of 2012, the group intends to reduce staff levels to 102,000 from 104,100 today.

Air France's chief executive Alexandre de Juniac insists that this reduction in staffing, which is to occur principally at the French airline, will not involve forced redundancies. This is even though the airline's cabin crew rejected new labour agreements. Their current deal is not due to expire until the end of March 2013, but Air France had hoped they would accept revised terms this summer and says that a new agreement proposed in 2013 will not be as generous.

The airline's ground staff have already accepted a new agreement increasing their number of working hours by 5.5% on average and simplifies job definitions which de Juniac says will "reduce the number of rungs in the ladder of corporate hierarchy".

Air France's pilots are currently considering whether to accept new contracts that will increase their medium-haul flying hours by 65 to 700 and will increase their long-haul flying hours from 710 to 740.

The group set aside a restructuring provision of €368 million in the first quarter to cover voluntary redundancies at Air France. This together with fuel hedging losses of €372 million dragged down the group's net result for the quarter to €895 million compared to €197 million at the same stage last year.

Group chief financial officer Philipe Calavia says an improvement in revenues of 4.5% for the quarter was assisted by "a rebound in certain economic zones around the world" and says the airline saw "good growth in its long-haul activities". Its load factors increased by 2% during the second quarter in comparison to 2011 and were also up 2% for the first half of the year.

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