Category Archives: Air France

Air France-KLM: Travel restrictions still impacting the Group’s activity

Larger 2021 titles

Air France-KLM issued this financial report for the first quarter:

 

Over the first three months of the year, the Group continued to be negatively impacted by travel restrictions as the whole industry:

 Revenue at 2.2 billion euros, down 57% compared to last year

 EBITDA loss at -0.6 billion euros, mitigated due to strict cost control and national partial activity schemes

 Operating result at -1.2 billion euros, down 0.4 billion euros compared to last year

Net income at -1.5 billion euros, after taking interest charges into account

 Net debt at 12.5 billion euros, up 1.5 billion compared to end of 2020

 At 31 March 2021, the Group has 8.5 billion euros of liquidity and credit lines at disposal

 Early April 2021, first set of balance sheet strengthening measures successfully executed resulting in an increase of €4bn equity and improved cash position by €1bn

OUTLOOK

Due to the stricter lockdown in France until, at least beginning of May, continuation of the lockdown in the Netherlands and travel restrictions worldwide still in place, the Group anticipates the beginning of the second quarter to be similar to the first quarter whereby the customer booking behavior is still short-term oriented.

The key to reduce travel restrictions and reopen borders is a rapid roll-out of wide-scale vaccination. In the US, domestic demand is recovering rapidly due to the speed of the vaccination process.

In this context, the Group expects capacity in Available Seat kilometers circa index 50% for Air France-KLM in the Second quarter 2021 compared to 2019 for the Network passenger activity. During the second half of the second quarter the Group will progressively ramp up capacity given the vaccination deployment in Europe.

For the Third quarter the Group foresees a capacity in Available Seat kilometers index in the range of 55% to 65% compared to 2019 for the Network passenger activity thanks to estimated higher demand.

The Air France-KLM Group continues to work to strengthen its balance sheet. Additional measures of equity and quasi-equity instruments are currently under consideration. Extraordinary resolutions will be presented at the next Annual General Meeting, aiming to give the Board of Directors great flexibility to restore equity.

Transavia: Operating result –120 million euros as impacted by Covid-19 crisis

The First quarter operating result ended -38 million euros lower compared to last year at an operational loss of -120 million euros, as a result of the ongoing Covid-19 crisis with strict border restrictions in Europe and North Africa.

First quarter activity level was only around 20% of last year’s production, with a unit revenue down – 21.6% compared to 2020. Load factor at 57.6% was impacted by travel restrictions imposed. The production level of Transavia France was slightly higher at and index of 26 compared to 2020, thanks to the start of domestic routes.

Transavia plan to grow is still valid, well positioned to capture the leisure traffic recovery foreseen in the coming months towards the end of the summer, being a major opportunity for the Group’s competitiveness gain. The adding of eight Boeing 737-800 aircraft to Transavia France fleet in the first quarter is part of this plan.

OUTLOOK

Due to the stricter lockdown in France until, at least beginning of May, continuation of the lockdown in the Netherlands and travel restrictions worldwide still in place, the Group anticipates a difficult start of the Second quarter whereby the customer booking behavior is still short-term oriented.

The key to reduce travel restrictions and reopen borders is a rapid roll-out of wide-scale vaccination. The vaccination pace in Europe is slower than in the US where the domestic demand recovers quickly thanks to the high speed vaccination process.

In this context the Group expects capacity in Available Seat kilometers circa index 50% for Air France-KLM in the Second quarter 2021 compared to 2019 for the Network passenger activity. During the second half of the second quarter the Group will progressively ramp up capacity given the vaccination deployment in Europe.

For the Third quarter the Group foresees a capacity in Available Seat kilometers between index 55% and 65% compared to 2019 for the Network passenger activity thanks to estimated higher demand.

At 31 March 2021, the Group has a 8.5 billion euros of liquidity and credit lines at disposal. This level can be considered comfortable, given the expected recovery in the summer, despite the cash requirements for 2021 which include:

 Q2 2021 EBITDA expected to be in the same range as EBITDA Q1 2021

 Capex spending inferior at 2.0 billion euros in 2021, but largely funded for fleet investments

 Restructuring cash out at 0.5 billion euros in 2021, part of which is financed by the associated reduction in the wage bill

A first set of capital strengthening measures was successfully executed in April and resulted in an increase in equity of 4 billion euros and cash of 1 billion euros.

The Air France-KLM group continues to work on strengthening its balance sheet. Additional equity and quasi-equity measures are currently under consideration. Extraordinary resolutions will be presented at the next Annual General Meeting, aiming to give the Board of Directors great flexibility to restore equity and initiate the gradual refinancing of state aid and restore leverage ratio.

Top Copyright Photo: Revised AF livery: Air France Boeing 777-328 ER F-GZND (msn 35543) CDG (Manuel Negrerie). Image: 953530.

Air France aircraft slide show:

Air France to launch the Paris CDG – Denver route on July 2

Air France will launch on July 2, 2021 a new connection between Paris-Charles de Gaulle and Denver International Airport (Colorado). Up to three direct flights will be operated each week (on Wednesdays, Fridays and Sundays) by a Boeing 787-9 Dreamliner with a capacity of 279 seats (30 in Business cabin, 21 in Premium Economy and 228 in Economy).

This new destination will thus strengthen Air France’s service to the United States. Subject to the easing of travel restrictions, the airline will offer flights to 12 US cities during the 2021 summer season: Atlanta, Boston, Chicago, Detroit, Denver, Houston, Los Angeles, Miami, Minneapolis/St. Paul, New York, San Francisco and Washington D.C.

With this new route, Europe will be connected to Denver for the first time nonstop by a SkyTeam member airline.

This flight schedule is subject to change depending on travel restrictions. Since the beginning of the COVID-19 crisis, Air France has been adjusting its offer in real time, taking into account changes in the health situation. Prior to any trip, Air France invites its customers to check the conditions of entry and the documents required on arrival at their destination.

The best of Air France on board the Boeing 787

For Air France customers traveling to Denver, the Boeing 787 provides a number of assets. They will enjoy a real cocoon in the sky in the Business cabin and even more comfort in Premium Economy and Economy with:

–          On-board WiFi adapted to customers’ needs and expectations;
–          Windows that are approximately 30% larger than on similar aircraft;
–          Improved air pressure and humidity levels for greater travel comfort;
–          20% less fuel consumption than previous generation aircraft;
–          A significant reduction in CO2 emissions (about 20%) as well as noise emissions.

F-HRBJ

 

Above Copyright Photo: Air France Boeing 787-9 Dreamliner F-HRBJ (msn 42497) PAE (Nick Dean). Image: 950659.

Air France aircraft slide show:

Air France-KLM and China Eastern Airlines to reinforce their partnership

Air France-KLM has made this announcement:

In the context of the participation of China Eastern Airlines to the share capital increase of Air France-KLM, both airline groups have decided to extend the scope of their partnership through:

     an intensified commercial cooperation and an extended collaboration to noncommercial related activities (e.g. ground services, catering or maintenance) ;

      an increased footprint on the Beijing market, with the Paris-Beijing and Amsterdam-Beijing routes joining the current Joint Venture existing between Air France-KLM and China Eastern Airlines when conditions are satisfied.

Air France-KLM and China Eastern Airlines are historical partners, with a codeshare cooperation that started in 2000 on the Paris-Shanghai route, a first Joint Venture agreement signed between Air France and China Eastern Airlines in 2012, and an extension of this
agreement to KLM in 2016. China Eastern Airlines took an equity stake in Air France-KLM in 2017, shaping the ambition for a long term strategic partnership.

With this expansion of the cooperation between Air France-KLM and China Eastern Airlines, both airline groups clearly are clearly paving the way to create the most efficient and powerful Joint Venture between Europe and China.

Air France increases services to leisure destinations in France, Europe and North Africa

Air France Airbus A321-211 F-GTAD (msn 777) CDG (Manuel Negrerie). Image: 953408.

Air France made this announcement:

  • 80 seasonal routes including 22 new routes in France, Europe and North Africa
  • Fully modifiable and refundable tickets


​To support the gradual recovery in travel expected over the summer period, Air France is increasing services to leisure destinations.

During the summer season, the airline will operate 80 seasonal routes – including 22 new ones – to France, Europe and North Africa from Paris-Charles de Gaulle, Paris-Orly and the French regions.

These seasonal routes will be added to Air France’s existing flight schedule.


14 new routes in Europe and North Africa

With 39 seasonal routes on the medium-haul network, Air France will offer its customers a wide choice of destinations. This summer, the airline is adding 14 new routes to its network:

  • Paris-Charles de Gaulle to/from Tangiers and Agadir (Morocco), Monastir (Tunisia), Valletta (Malta), Las Palmas (Canary Islands, Spain), Corfu and Rhodes (Greece) from 5 July 2021
  • Paris-Orly to/from Bari (Italy) as of 31 May 2021, Ibiza (Spain) and Algiers (Algeria) as of 28 June 2021
  • Marseille-Provence to/from Catania (Italy) from 26 June 2021 and Corfu (Greece) from 19 July 2021
  • Nice-Côte d’Azur to/from London (UK) and Tunis (Tunisia) from 28 June 2021


​8 new routes in France

Air France will also accompany its customers on their travels in France. 41 seasonal routes will be available, including 8 new ones:

  • Paris-Charles de Gaulle to/from Ajaccio, Bastia, Calvi and Figari from 5 June 2021
  • Perpignan to/from Brest, Strasbourg and Nantes from 25 June 2021
  • Biarritz to/from Caen from 25 June 2021


Air France will shortly be detailing its long-haul flight schedule for the 2021 summer season.

This flight schedule is subject to change depending on travel restrictions. Since the beginning of the COVID-19 crisis, Air France has been adjusting its offer in real time, taking into account changes in the health situation.

1 Modifications – possibility of changing the date and/or destination of your ticket regardless of the fare conditions until the day of departure of the 1st flight. If the price of the new ticket is higher, the fare difference will be charged to the customer.
2 Refunds – possibility of requesting a ticket refund up to the day of departure of the 1st flight. If the fare conditions of your ticket do not allow a refund, a credit voucher valid for one year will be issued, the refund of which can be requested at any time.

Top Copyright Photo: Revised livery: Air France Airbus A321-211 F-GTAD (msn 777) CDG (Manuel Negrerie). Image: 953408.

Air France aircraft photo gallery:

Air France aircraft slide show:

Air France-KLM announces a plan of capital-strengthening measures with the objective of strengthening its balance sheet, preparing the recovery and repositioning the Group on a sustainable financial trajectory

Air France-KLM Group has made this announcement:

 Air France-KLM has announced the following measures in relation to Air France, which have been approved by the European Commission in its decision to authorize a €4 billion French State measures to recapitalize Air France and its Holding company:

 A capital increase for an amount up to €1 billion, with a priority subscription period for shareholders, subject to market conditions and the prior approval on the prospectus by the Autorité des marchés financiers (the “AMF”) and,

 Simultaneously, conversion of the €3 billion French State direct loan drawn into perpetual hybrid bonds instrument.

 The Dutch State is continuing discussions with the European Commission regarding potential capital-strengthening measures for KLM.

 Additional measures to further strengthen the Group’s capital are currently under consideration, with several steps to be taken before the 2022 Annual General Meeting.

On April 5 the Air France-KLM Group’s Board of Directors approved a plan to start the restoration of the Group’s negative equity and further reinforce its cash position:

Capital increase with priority subscription period for shareholders – The Group intends to launch a capital increase subject to market conditions and the approval on the prospectus by the AMF.

– This capital increase will be launched without preferential subscription rights but with a priority period for the shareholders, within the limits of the nineteenth resolution approved at the Annual General Meeting on May 26, 2020, allowing existing shareholders to not be diluted, by subscribing shares during the priority period up to their stake in Air France-KLM’s share capital. The offering will be composed of a private placement to institutional investors, a public offering and a priority period allowing all shareholders to support this transaction.

– The French State commits to participate in the capital increase while keeping its stake strictly below 30% of the share capital and voting rights.

– China Eastern Airlines intends to participate while keeping its stake strictly below 10% of share capital, as part of further reinforcement of strategical cooperation with the Group.

– The Dutch State which holds 14.0% of the share capital, has informed the Group that it will not subscribe to this capital increase.

– Delta Air Lines which holds 8.8% of the share capital, has informed the Group that it will not subscribe to this capital increase due to the current framework of the CARES act in place in the United States.

– This operation will improve the Group’s equity by up to €1 billion under IFRS and French GAAP accounting standards, and bring the same amount of new money to the Group for the benefit of Air France. Simultaneously, the fully drawn conversion of €3 billion French State loan into perpetual hybrid bonds instrument (“Super Subordinated Notes”):

– The €3 billion direct loan provided by the French State to Air France via Air FranceKLM late in May 2020 will be converted into Super-Subordinated Notes of the same nominal amount to Air France via Air France-KLM, allowing the Group to restore part of its equity under IFRS accounting standards.

– This operation will improve the Group’s equity by €3 billion under IFRS accounting standards with no cash impact, while increasing the Group’s flexibility in its mandatory debt redemption profile spread over time (with Non Call period ranging from 4 to 6 years).

The Dutch State approved this set of actions and indicated that it was continuing discussions with the European Commission on potential capital- strengthening measures for KLM.

Together with the expected recovery in EBITDA, this first step of capital-strengthening measures will progressively help the Group to reduce the Net Debt/EBITDA ratio below 3.0x by 2023.

Additional measures to further strengthen the balance sheet are currently under consideration with several steps to be taken before the 2022 Annual General Meeting, as the Group’s net equity will remain negative after this first step.

These measures could include the issuances of appropriate amounts of new equity as well as proportionate quasi-equity instruments, subject to market conditions. The hybrid perpetual bond instruments fully subscribed by the French State and resulting from this first step recapitalization could be used to compensate in part, by way of netting, to future equity and or quasi-equity raisings by the Group.

The objective of such additional measures will be to further reinforce the Group’s equity situation and reduce its Net Debt/EBITDA ratio circa 2.0x by 2023. In order to achieve this, specific delegations would be then required and submitted at the Group’s next General Meeting, scheduled on May 26.

Additionally, the French state-backed loan (Pret Garantie d’Etat “PGE”) of €4 billion has been extended with a final maturity date in 2023. The Dutch State-backed loan guaranteed loan of €2.4 billion has a maturity date in 2025. These elements enable smoothen the debt redemption profile of the group and the airlines a smooth extension of the debt maturity profile of the Group.

Commitments made in order to comply with the European Commission’s “Temporary Framework for State aid measures to support the economy in the current Covid-19 outbreak” (TF).

Air France-KLM will be subject to commitments made by the French government in order to comply with the European Commission’s “Temporary Framework for State aid measures to support the economy in the current Covid-19 outbreak” (TF).

These commitments, specifically paragraphs 60-61 and 71-78 of the TF, include Air France’s release of up to 18 take-off and landing rights (slots) at Paris-Orly airport to a competing carrier in order to create or develop an existing base at that airport, provided that the competing carrier obtaining Air France’s slots bases its aircraft and crews at Paris-Orly airport, in compliance with national and EU labour laws. Other general commitments were made under the TF, including restrictions on acquisitions, share buy-backs dividend distributions and executive management’s remuneration. These commitments are applicable to the entire Group with the exception of KLM and its subsidiaries.

The Group has reiterated the economic, financial and environmental commitments made in the framework of the State loan and reflected in its transformation plan. The Group therefore maintains an ambitious environmental roadmap to accelerate the Group’s sustainable transition, in line with the objectives of the National Low Carbon Strategy (Stratégie Nationale Bas Carbone “SNBC”).

“Today’s announcement demonstrates both the strong commitment of the French State and the renewed support of the Dutch State to help the Group weather this pandemic and this crisis,” said Anne-Marie Couderc, Chair of Air France-KLM Board of Directors. “The commitment of our long-standing partner China Eastern Airlines to participate in the forthcoming capital increase also highlights a resolute confidence in the strengths and prospects of the Air France-KLM Group.”

“These first recapitalization measures are an important milestone for our Group in this exceptionally challenging period,” said Air France-KLM Group CEO, Benjamin Smith. “They will provide Air France-KLM with greater stability to move forward when recovery starts, as large-scale vaccination progresses around the world and borders reopen. Ensuring Air FranceKLM maintains a sustainable financial trajectory is paramount to realizing our strategic plan, continuing the execution of our transformation plans at the Group and at our airlines. I would like to thank our employees for their engagement and their responsibility throughout this crisis. We will continue to work together to drive new efficiencies as we seek to lower unit costs and emerge stronger when the industry rebounds with the ambition to achieve European leadership”.

Outlook for Q1

As expected, the Air France – KLM Group continued to be negatively impacted by the COVID crisis during the first quarter of 2021, notably by the surge of a third wave of the pandemic in several European countries and by the continuation of air travel restrictions taken by a significant number of countries.

Based on the accounting results of January and February and on the reforecast made at the end of each month, the Group expects the operating result for the first quarter of 2021 to be around EUR -1.3 billion, and EBITDA to be around EUR -750 million, below Q4 2020 EBITDA as indicated at full year 2020 results presentation. It should be noted that in the first two months of 2021, operating result and EBITDA were significantly better than the Group’s budgeted assumptions, and capital expenditure was also 10% below budget over that period, reflecting the effective control introduced by management on CAPEX, allowing the Group to have a solid 8.8 billion euros of liquidity and credit lines at disposal at 28 February 2021.

Over the coming months, and in particular at the beginning of the summer, the Group still expects a significant recovery in demand, assuming the positive effects of the accelerated vaccination campaigns in several countries could trigger less stringent restrictions on passenger travel across those countries.

Air France revises its livery with larger titles and other subtle changes

Air France's 2021 revised livery

Air France has made some subtle changes to its 2009 livery. Two aircraft (one pictured above) show off the changes (now the 2021 livery).

The revised livery of Air France is now being seen on at least one Airbus A318 and two A320s at the Paris CDG hub.

The revised livery includes slightly larger titles. The AF logo is now placed behind the cockpit. The SkyTeam logo has been moved to the rear part of the fuselage below the window line near the rear door.

Top Copyright Photo: The revised livery: Air France Airbus A318-111 F-GUGO (msn 2951) CDG (Manuel Negrerie). Image: 953000.

Below Copyright Photo: The 2009 livery on a recent delivery: Air France Boeing 787-9 Dreamliner F-HRBJ (msn 42497) PAE (Nick Dean). Image: 950660.

F-HRBJ

Air France aircraft slide show:

Preview of Air France’s new safety video

Air France-KLM loses 1.7 billion euros ($2.05 billion) in 2020

Air France-KLM Group issued this financial statement:

The COVID-19 crisis severely impacted the Full Year 2020 results:

 Revenue at 11.1 billion euros, down 59% compared to last year

 EBITDA loss at -1.7 billion euros, limited due to cost control

 Group net employee cost down 35% in 2020 compared to last year, supported by staff reductions, state support mechanisms and activity related wages. Average number of FTEs (Full Time Equivalent) in December 2020 decreased by 8,700 compared to December 2019

 Operating result at –4.5 billion euros, down 5.7 billion euros compared to last year

 Net income at -7.1 billion euros, including restructuring provision at -822 million euros, overhedging at -595 million euros and fleet impairment at -672 million euros

 Net debt at 11.0 billion euros, up 4.9 billion compared to end of 2019  At 31 December 2020, the Group has 9.8 billion euros of liquidity and credit lines at disposal

Read the full report.

Air France is awarded 4-star “COVID-19 Airline Safety Rating” by Skytrax

Air France has made this announcement:

Air France to serve the French Caribbean, French Guiana and Reunion Island from Paris (CDG and Orly) again

Air France has made this announcement:

Air France is increasing its service to the French Overseas Departments. This summer, the company will operate flights between the French Caribbean (Pointe-à-Pitre in Guadeloupe and Fort-de-France in Martinique), French Guiana (Cayenne) and Reunion Island (Saint-Denis de La Réunion) and Paris-Charles de Gaulle, in addition to its frequencies to and from Paris-Orly. Up to 56 flights will operate every week between these destinations and the two Paris airports, providing connections to the airline’s entire short, medium- and long-haul network.

Launched last December, the number of services between Paris-Charles de Gaulle and the French Caribbean will increase, with 7 weekly flights to and from each of the two islands.

Services between Paris-Charles de Gaulle and Cayenne and between Paris-Charles de Gaulle and Saint-Denis de La Réunion will be launched on 2 and 6 April 2021 respectively.

Flight schedule –2021 summer season:

To/from Pointe-à-Pitre: 18 weekly direct flights

  • 11 weekly direct flights on departure from Paris-Orly
  • 7 weekly direct flights on departure from Paris-Charles de Gaulle

To/from Fort-de-France: 14 weekly direct flights

  • 7 weekly direct flights on departure from Paris-Orly
  • 7 weekly direct flights on departure from Paris-Charles de Gaulle

To/from Cayenne: 10 weekly direct flights

  • 7 weekly direct flights on departure from Paris-Orly
  • 3 weekly direct flights on departure from Paris-Charles de Gaulle on Wednesdays, Fridays and Sundays as from 2 April 2021

To/from Saint-Denis de La Réunion: 14 weekly direct flights

  • 7 weekly direct flights on departure from Paris-Orly
  • 7 weekly direct flights on departure from Paris-Charles de Gaulle as from 6 April 2021

Flights will be operated by Boeing 777-200 and -300 equipped with Business, Premium Economy and Economy cabins.

Air France aircraft photo gallery:

Air France aircraft slide show:

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