Wednesday, 20 February 2019

Air France - KLM full year 2018 results

The Air France - KLM group has released its 2018 full-year today which demonstrates how the group still managed to achieve a strong performance despite higher fuel costs and strike action.  In total, more than 100 million passengers flew on the group's airlines during 2018, leading to revenue increases across the board. However, it is clear that once again the groups' survival is thanks mainly to the continued good operations of Transavia and KLM.

The operating result of € 1,332 million was, according to the group, thanks in part to strong commercial performance, cost control and streamlining.  2018 also saw further reductions in the Groups net debt, down €195 million to €6.2 billion. 

In the latest results. the group said it will continue to work on yield improvement within the context of an anticipated fuel bill increase. 
Based on the current data for the Passenger network:
Long-haul forward booking load factors from February to April are on average stable compared to last year, and positively oriented for the early summer,
Passenger unit revenues at constant currency expected below last year for the first quarter 2019 partly due to the Easter shift,
Unit cost (CASK) reduction between -1% and 0% at constant currency and fuel price,
Net debt/EBITDA ratio below 1.5x.
The Board of Directors of Air France-KLM, chaired by Anne-Marie Couderc, met on 19 February 2019 to approve the financial statements for the Full Year 2018.

"With the largest long-haul network operating out of Europe, the Air France-KLM Group has reached an important milestone by carrying more than 100 million passengers in 2018", commented Benjamin Smith, CEO of Air France-KLM. "The strong performance of our front-line teams and continued cost control helped partly offset the impact of strikes at Air France in the first half of the year, as well as significant fuel headwinds. In the past five months, we have made significant progress in reinforcing the trust and dialogue with our employees in both Air France and KLM, allowing for a shared strategic approach to accelerate the Group's profitable development. I am particularly pleased that yesterday we reached the last step in this phase, the majority of Air France pilots having approved the proposed categorical agreement. We have also strengthened our offer by simplifying our brand portfolio and initiating an improvement in our network and fleet management. These first achievements pave the way for our ambition to regain a leading position in Europe and worldwide."

Air France signed a new Pilot staff category agreement with the SNPL. This agreement remains open for signature until February 22, 2019. It is already valid as the SNPL represents 75.9% of the votes cast in favour of the pilot representative unions.

“I wish to thank the pilots for massively approving this agreement. This agreement forms the basis of a strong culture that acknowledges their leadership.  After the Mandatory Annual Negotiation (NAO) agreements already signed with all our stakeholders, Air France-KLM is now in a position to begin implementing more ambitious plans and winning back its European leadership position”, stated Benjamin Smith.

The SNPL has also signed the inter-category pay agreement of October 19, 2018.

These agreements provides the flexibility required to support Air France’s new ambition while setting out measures to improve flight safety, the commercial strategy, operational performance, and pilots’ daily lives and pay.

On KLM's performance, President & CEO Pieter Elbers said, "Results for 2018 show an excellent operating result. The course KLM has chosen since 2014, combining cost-savings with investments, bore fruit once again this past financial year. Following the record operating result (COI) for 2017, KLM showed another excellent operating result of EUR 1,073 million and an operating margin of 9.8% for 2018.KLM is making good progress in other areas as well. Load factor increased further to 86.6% and operational performance improved on virtually all indicators. Customer satisfaction, measured in Net Promotor Score (NPS), rose to 42. The combination of investments and hard work on the part of all KLM staff to provide good service is clear to see in this excellent customer rating.These are results that we can all be proud of!"