Air France KLM narrows losses, bookings begin to resume Reuters

© Reuters. File photo: Passengers wait at the Air France counter at Nice International Airport in France on February 20, 2020. REUTERS/Eric Gaillard

Authors: Tim Hepher and Anthony Deutsch

Paris/Amsterdam (Reuters)-Air France-KLM Group said on Friday that the relaxation of coronavirus travel restrictions is producing the first signs of recovery, as the airline announced a smaller second-quarter loss, plus operating cash Is positive.

Although passengers are returning to the air, the uncertainty of COVID-19 rules remains a problem. KLM stated that since most Europeans are now fully vaccinated, countries should act quickly to harmonize regulations to enable more air travel.

Peter Elbers, head of KLM’s Dutch department, said in an interview: “Obviously, the first quarter was bad for KLM, and it could be worse because of the very specific double testing measures.” He pointed out. It is the requirements of the Netherlands for passengers. Two negative tests are provided for the return flight.

“In the second (quarter), we saw a significant improvement. Even in the second quarter, we saw the numbers rebound. June was better than April, and in the first week of July, Amsterdam was the best in Europe. Busy airport,” he said. Tell Reuters.

But Elbers said that people are still reluctant to travel and called on European countries to reopen their borders.

The French-Dutch group’s loss before interest, taxes, depreciation and amortization (EBITDA) for the quarter was 248 million euros ($294.7 million)-a global lockdown that was triggered by the pandemic a year ago.

The company said it expects EBITDA in the third quarter to be positive, adding that its mid-term operating profit margin target remains unchanged.

Air France-KLM shares rose less than 1% in early trading.

With the reopening of the North Atlantic route to Americans heading to Europe, long-distance capacity has risen again, Air France-KLM now expects that capacity will reach 60%-70% of 2019 levels in the third quarter, compared to 55%-65% in May. .

In contrast, British Airways owner IAG (LON:) bet more cautiously, saying summer capacity will rise to 45% of pre-pandemic levels.

However, since most Europeans are still unable to travel to the United States, Air France and KLM declined to provide a capacity forecast for the fourth quarter and called for reciprocal measures to open borders and speed up global vaccination.

While the Americans are slowly returning to Europe, Elbers said: “I hope that the United States will open its borders again as soon as possible, and we can see a further increase in travel. If I see the trends in the past few months, we really It can be kind and positive.”

Since the beginning of the crisis, operating free cash flow after lease repayment has reached 210 million euros for the first time. Due to the increase in ticket sales, its two major airlines have positive cash.

Chief Financial Officer Steven Zaat said the group believes that summer bookings in Europe are “good”, but later than usual.

The airline’s revenue soared from 1.57 billion euros to 2.75 billion euros.

Fuel costs increased by about 300 million euros, mainly due to additional capacity and the slight impact of rising oil prices, as well as a more favorable hedging contract buffer.

(1 USD = 0.8419 Euro)

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