Air France-KLM finances affected by A380 retirement

November 1, 2019

 

In its financial results for the third quarter of 2019, Air France-KLM announced a net profit down by more than half compared to the same period in 2018. The airline says it was affected by the retirement of the A380 from its fleet, and a “challenging macro-economic context”. 


Air France reports a net income of €366 million, down by €420 million compared to the previous year. It was affected by “a stronger dollar end of September” and the phasing out of seven Airbus A380 from its fleet. This had a “financial impact of €100 million”. In July 2018, the group announced its intention to sell its five superjumbos by 2022. The total cost of the retirement, evaluated at €400 million, will be spread until the end of 2022.

After months of uncertainty on the fate of the A380, Air France-KLM finally announced it would sell the five superjumbos it owns by 2022. The group also confirmed the acquisition of 60 A220-300 aircraft as part of its fleet modernization strategy and reported strong results for the second quarter of 2019.

The airline also registered an operating result at €900 million, down by €165 million, with revenues up 2% and fuel expenses up by 135 million euros. “Air France-KLM Group’s performance in the third quarter showed resilience amid geopolitical uncertainties and softening macro-economic environment,” commented Air France-KLM CEO Benjamin Smith, adding that “operationally, we achieved a solid performance during the Summer peak travel period”.

Air France-KLM confirmed its objective of reducing unit costs, with a targeted 2019 reduction of between -1% and 0% at constant currency and fuel price. The group revised slightly upward its fuel bill forecast for 2019, expecting an increase of 600 million euros compared to 2018, against 550 million previously, to 5.5 billion euros. 

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