In the end the net result may be significantly deficit

Air France-KLM was very unpleasantly surprised yesterday by announcing, for the first time in the history of the group, a third-quarter operating loss (October-December) of its 2007-2008 fiscal year, ended March 31. In a brief statement, the group left even a doubt on the annual result, which "should remain positive, but the"level will depend on the evolution of the economic situation in the coming weeks"." In August, Air France-KLM was still on a "clearly beneficiary" operating income for the current year, after provided 1 billion euros in profits early in the year.

This warning on result, sanctioned yesterday on the stock exchange by a fall of 9.48 of the title to 7.791 euros, illustrates the brutality of the degradation of activity since September, which resulted in "a slight weakening of unit revenue passenger and a strong deterioration of cargo receipt". The press release reveals no precise figure, the publication of the results are always set on 13 February for the third quarter, and on 20 may for the annual. But, from information to analysts, the third quarter would result in a loss of 200 to 220 million euros, against 311 million year last at the same time. However, the consensus of analysts was on a profit of EUR 100 million. In the annual operating result, he could finally settle around 200 m, 600 to 700 million mentioned in recent weeks. Sales that however does not take into account new exceptional charges related to the depreciation of the oil covers. According to some estimates, could reach 700-800 million euros. In the end, the net result may be significantly deficit.

Customer transfers

Air France and KLM companies appeared yet better resisting than their competitors, they, whose passenger traffic was still on the rise in October, November and December. But, according to our information, the unit recipe still positive in October turned red in November, then plunged in December. And if economy class traffic increased, so that business travellers are massively deferred at the rear of the aircraft. A transfer of customer added the "catastrophic" collapse of the cargo activity. Started in June, she accelerated late in the year, with record decreases of 12.2 in November and 20.4 in December, and could lead to hundreds of millions of euros of losses on the year.

Moreover, as stated in its press release, Air France-KLM could not take advantage of the decline in the price of oil, having covered its needs for an average price of $ 80 per barrel. The Group had even to review rising oil bill, which is expected to reach $ 5.9 billion EUR 5.7 billion planned. From arranging, the situation should even worse in the fourth quarter. According to our information, the State of bookings for January, February and March would show a decline of 25 of the high contribution. Unit recipe, it should continue to deteriorate, particularly because of the general decline of the domestic tariffs. The only alternative would be a massive reduction of costs. There is no doubt that the subject will be the order of the day next meetings between unions and the new direction.