Renewed Covid-19 lockdowns pushed Air France-KLM deeper into the red as it chalked up a €7.1 billion ($8.5bn) net loss for 2020 and postponed a key mid-term profitability goal, the airline group said on Thursday.
The airline group expects to fly 40 per cent of its pre-crisis capacity in January-March, as tougher travel curbs in France and beyond widen losses from the €407 million in negative earnings before interest, taxes, depreciation and amortisation recorded in the fourth quarter.
The past year has "tested the Air France-KLM Group with the most severe crisis ever experienced by the air transport industry," chief executive Ben Smith said.
The worsening travel outlook threatens to ruin Europe's critical summer season and leave major carriers in need of another round of funding support, analysts warn.
Air France-KLM last year received €10.4bn in loans and guarantees from France and the Netherlands and is negotiating the terms of a state-backed recapitalisation, with EU regulators pushing for airport slot concessions.
The Air France business recorded a €989m operating loss last quarter, more than six times wider than KLM's €152m deficit. Performance disparities have in the past sharpened Franco-Dutch tensions between the airlines and their government shareholders.
The cargo business, a bright spot for many airlines as grounded flights push up freight prices, saw unit revenues more than double in the fourth quarter.
The quarterly net loss of €1bn was less than the €1.31bn deficit analysts expected, according to the company's own consensus polling. Revenue fell 64.3 per cent to €2.36bn on a 78 per cent traffic decline.
Operating cash flow was a negative €2.12bn last quarter, and net debt increased by €4.9bn over the year to €11.05bn as of December 31, against €9.8bn in liquidity.
Air France-KLM cut its workforce by 10 per cent, or 8,700 full time-equivalent positions, in 2020 and expects to eliminate a further 6,000 "in coming years", it said.
The group also flagged a likely further postponement of the 7 per cent to 8 per cent operating margin objective it had pushed back last July by a year to 2025. The goal is "unchanged but delayed", it said without giving a new target date.
RESULTS
Bantamweight: Victor Nunes (BRA) beat Azizbek Satibaldiev (KYG). Round 1 KO
Featherweight: Izzeddin Farhan (JOR) beat Ozodbek Azimov (UZB). Round 1 rear naked choke
Middleweight: Zaakir Badat (RSA) beat Ercin Sirin (TUR). Round 1 triangle choke
Featherweight: Ali Alqaisi (JOR) beat Furkatbek Yokubov (UZB). Round 1 TKO
Featherweight: Abu Muslim Alikhanov (RUS) beat Atabek Abdimitalipov (KYG). Unanimous decision
Catchweight 74kg: Mirafzal Akhtamov (UZB) beat Marcos Costa (BRA). Split decision
Welterweight: Andre Fialho (POR) beat Sang Hoon-yu (KOR). Round 1 TKO
Lightweight: John Mitchell (IRE) beat Arbi Emiev (RUS). Round 2 RSC (deep cuts)
Middleweight: Gianni Melillo (ITA) beat Mohammed Karaki (LEB)
Welterweight: Handesson Ferreira (BRA) beat Amiran Gogoladze (GEO). Unanimous decision
Flyweight (Female): Carolina Jimenez (VEN) beat Lucrezia Ria (ITA), Round 1 rear naked choke
Welterweight: Daniel Skibinski (POL) beat Acoidan Duque (ESP). Round 3 TKO
Lightweight: Martun Mezhlumyan (ARM) beat Attila Korkmaz (TUR). Unanimous decision
Bantamweight: Ray Borg (USA) beat Jesse Arnett (CAN). Unanimous decision
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Why seagrass matters
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The Year Earth Changed
Directed by:Tom Beard
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Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Wednesday and the pair embraced but he failed to give her his backing as she cried a day earlier.
A spokesman said her upset was due to a personal matter.
