Air France-KLM (Air France and KLM Royal Dutch Airlines) (Paris and Amsterdam) today announced a second quarter loss of €79 million ($86.4 million), widening the first half loss.
As a result, the group stated it would cut another €300 million ($328 million) in costs. The group will continue to cut unprofitable routes.
The group announced these immediate measures:
Launch of immediate cost-saving measures
Acceleration of all cost reduction initiatives
Adjustment of Winter 2015-16 capacity
The group blamed the widening loss on increased competition and exchange rate issues.
Alexandre de Juniac made the following comments:
“In the First Half 2015, Air France-KLM’s results were characterized by exceptional volatility in exchange rates and the fuel price, and by on-going pressure on unit revenues. All the Perform 2020 cost-saving initiatives were identified and quantified, and productivity agreements have already been signed at KLM. Transavia is pursuing its rapid development and will serve 47 cities on departure from Paris this summer. The maintenance business is posting strong growth.
The lack of results improvement leads us to implement immediate additional adaptation measures including, in particular, the closure of heavily loss-making routes, the downward revision in capacity for the forthcoming Winter season, together with an acceleration and an increase in the magnitude of our cost-saving initiatives. Following the agreement signed by KLM with its unions, the rapid conclusion of the negotiations with the Air France unions is key to re-launching the results turnaround. At this pivotal moment in Air France-KLM’s history, the Board and I know that we can count on the spirit of responsibility and commitment shared by all the Group’s staff to enable us to return to a growth path.”
Read the Financial Times analysis: CLICK HERE
In other news, KLM is banking on the new Boeing 787-9 (above) to give it a financial spark and lift. The airline issued this preview of the upcoming introduction of the new type:
For KLM Royal Dutch Airlines, the introduction of the Boeing 787-9 marks the dawn of a new age for both customers and crew. With this aircraft, KLM invests more than ever in its customers and future. KLM has chosen this new aircraft type to ensure its passengers an unforgettable and comfortable journey.
“The Boeing 787-9 enables KLM to offer passengers even more comfort and privacy. KLM has chosen to add specific improvements to this special aircraft, which make it unique among other 787s. All these details add up to ensure our passengers can experience a new way to fly.”
Pieter Elbers – KLM President & CEO
Among the most important features of the Boeing 787-9 are the new World Business Class (WBC) seats, which recline completely flat and have direct access to the aisle; the Economy Class seats, which recline 40% further; a state-of-the-art Inflight Entertainment system; and Wi-Fi for all passengers who want to be online during their flight. Finally, the interiors in WBC, Economy Comfort and Economy Class create a highly hospitable setting onboard.
Lower fuel consumption
With the arrival of this new aircraft type in October 2015, KLM is adding a quieter and more fuel-efficient aircraft to its fleet. The Boeing 787-9 is equipped with highly fuel-efficient engines, which will reduce CO2 emissions by at least 20%.
The aircraft is part of KLM’s program of fleet investment, which began with the introduction of the new World Business Class in the Boeing 747. This was followed by entirely new World Business Class and Economy Class interiors in the Boeing 777-200 and the phased introduction of new Boeing 777-300s. From December 2015, KLM will continue its fleet renewal with the deployment of the Embraer 175 and 190.
New flight mode
The design of the interior of the aircraft creates a typically KLM mood, layout and character onboard the Boeing 787-9. The point of departure for the cabin interior was to maximise comfort and privacy for passengers, while maintaining KLM’s brand values.
KLM’s Boeing 787-9 is fitted with onboard Wi-Fi. This marks the launch of KLM Wi-Fi, which was tested in earlier trials. It will now be possible to use the internet, email and other online services onboard using laptops, tablets and mobile phones.
Larger windows, a higher cabin pressure and special LED-lighting further enhance the unique flight experience. This is all aimed at ensuring passengers arrive fitter and more rested at their destinations.
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