01 August, 2019

Air France-KLM results at 30 June 2019

Key highlights for the European giant Air France-KLM in the second quarter include:

Passenger growth +5.1% and load factor +1.3 point.
Passenger unit revenue up by 0.8%.
Unit costs decrease by -2.3% at constant currency and fuel.
Operating result at 400 million euros, up 54 millions euros compared to the second quarter 2018 hit by Air France strikes1, and reflecting unit cost improvement partly offset by an increased fuel bill.
Further reduction in Group net debt, down 466 million euros to 5.7 billion euros and Net debt/EBITDA ratio at 1.4x, an improvement of -0.1pt compared to 31 December 2018.
Benjamin Smith, CEO of Air France-KLM Group, said: “In a challenging environment, Air France-KLM Group posted a robust second quarter. The slight increase in passenger unit revenue that we had anticipated, together with continued execution in unit cost reduction, enabled us to more than offset rising fuel costs. These elements, combined with satisfactory long-haul forward booking trends lead us to confirm our guidance for 2019. At the same time, we continue to implement our strategic vision focused on reducing costs and making our Group more robust in the very competitive marketplace in Europe. We have also made key decisions on the renewal of our fleet to transition to cleaner aircraft in order to support a more environmentally responsible operation, including the order of sixty Airbus A220s for short- and medium-haul and the accelerated phasing out of ten Airbus A380 to be replaced by more modern fuel-efficient aircraft.”

Air France-KLM GroupSecond QuarterFirst half
Passengers (thousands)27,800+5.1%50,474+4.2%
Passenger Unit revenue per ASK2 (€ cts)6.75+0.8%6.48-0.4%
Operating result (€m)400+5497-131
Net income – Group part (€m)80-30-240-81
Adj. operating free cash flow (€m)110+111351+210
Net debt at end of period (€m)  5,698-466

Second quarter 2019 business review 
Network: Solid revenue growth and increase in operating result
NetworkSecond QuarterFirst Half
2019ChangeChange constant currency2019ChangeChange constant currency
Capacity (ASK m)75,680+3.9% 145,440+3.2% 
Total revenues (€m)6,016+5.6%+3.9%11,191+3.8%+2.6%
Scheduled revenues (€m)5,708+5.8%+4.0%10,601+3.6%+2.3%
Operating result (€m)291+55+7712-138-68
Second quarter 2019 combined Passenger and Cargo revenues increased by 3.9% at constant currency to 6.0 billion euros, for capacity growth of 3.9%. The operating result amounted to 291 million euros, a 77 million euro increase at constant currency compared to last year, with the non-fuel unit cost improvement partly offset by a higher fuel bill.
Passenger network: Long-haul driving the improvement of unit revenue as anticipated
 Second QuarterFirst Half
Passenger network2019ChangeChange constant currency2019ChangeChange constant currency
Passengers (thousands)22,906+4.8% 42,651+3.7% 
Capacity (ASK m)75,680+3.9% 145,439+3.2% 
Traffic (RPK m)67,020+5.7% 127,241+3.8% 
Load factor 88.6%+1.5 pt 87.5%+0.6 pt 
Total passenger revenues (€m)5,482+6.4%+4.8%10,110+4.2%+3.2%
Scheduled passenger revenues (€m)5,254+6.6%+4.8%9,674+4.2%+2.9%
Unit revenue per ASK (€ cts)6.94+2.6%+0.9%6.65+1.0%-0.2%

Cargo network: Unit revenue impacted by a challenging airfreight market
 Second QuarterFirst Half
Cargo business2019ChangeChange constant currency2019ChangeChange constant currency
Tons (thousands)279+1.5% 549+0.7% 
Capacity (ATK m)3,630+2.8% 7,092+2.1% 
Traffic (RTK m)2,122+1.2% 4,168+0.9% 
Load factor 58.5%-0.9 pt 58.8%-0.7 pt 
Total Cargo revenues (€m)534-1.7%-4.1%1,081-0.5%-2.7%
Scheduled cargo revenues (€m)454-2.8%-5.2%927-1.7%-3.9%
Unit revenue per ATK (€ cts )12.54-5.1%-7.5%13.09-3.6%-5.7%

Transavia: High capacity growth and positive unit revenue
 Second QuarterFirst Half
Passengers (thousands)4,894+6.7%7,823+7.0%
Capacity (ASK m)9,527+9.2%15,353+10.0%
Traffic (RPK m)8,754+9.1%14,122+10.1%
Load factor 91.9%-0.1 pt92.0%+0.0 pt
Total passenger revenues (€m)500+10.4%748+8.7%
Unit revenue per ASK (€ cts)5.24+1.3%4.83-0.4%
Unit cost per ASK (€ cts)4.70+5.1%4.95+2.6%
Operating result (€m)52-9-19-22

Air France-KLM Group: Operating result at €400 million with positive passenger unit revenue and unit cost improvement
 Second QuarterFirst half
 2019ChangeChange constant currency2019ChangeChange constant currency
Capacity (ASK m)85,207+4.5% 160,793+3.8% 
Traffic (RPK m)75,774+6.1% 141,363+4.4% 
Passenger unit revenue per ASK (€ cts) 6.75+2.4%+0.8%6.48+0.8%-0.4%
Group unit revenue per ASK (€ cts) 7.28+1.6%+0.0% 7.05+0.2%-1.0%
Group unit cost per ASK (€ cts) at constant fuel 6.82-0.3%-2.3%6.99+0.4%-1.4%
Revenues (€m)7,050+6.4%+4.5%13,036+4.9%+3.3%
EBITDA (€m)1,147+98+1141,571-99-42
Operating result (€m)400+54+7297-131-69
Operating margin (%)5.7%+0.5 pt+0.8 pt0.7%-1.1 pt-0.6 pt
Net income - Group part (€m)80-30 -240-81
Income Statement
 Second QuarterFirst Half
In millions euros20192018Change20192018Change
Other revenues01-100.0%01-100.0%
Aircraft fuel-1,404-1,184+18.6%-2,605-2,245+16.0%
Chartering costs-135-146-7.7%-269-276-2.5%
Landing fees and en route charges-507-479+5.9%-941-906+3.9%
Handling charges and other operating costs-455-504-9.7%-909-980-7.2%
Aircraft maintenance costs-646-566+14.1%-1,298-1,183+9.7%
Commercial and distribution costs-267-278-4.1%-517-510+1.4%
Other external expenses-433-430+0.7%-872-824+5.8%
Salaries and related costs-2,048-1,959+4.6%-4,020-3,812+5.5%
Taxes other than income taxes-41-38+6.6%-93-87+6.9%
Other income and expenses241200+20.4%454436+4.1%
Amortization, depreciation and provisions-747-703+6.2%-1,474-1,442+2.2%
Income from current operations400346+15.6%97228-57.5%
Sales of aircraft equipment100nm23-4nm
Other non-current income and expenses-3520nm-30-23+30.4%
Income from operating activities375366+2.5%90201-55.2%
Cost of financial debt-115-122-5.8%-221-236-6.4%
Income from cash and cash equivalent1510+55.2%2720+35.0%
Net cost of financial debt-100-112-11.1%-194-216-10.2%
Other financial income and expenses-39-86-54.7%-110-74+48.6%
Income before tax236168+40.5%-214-89+140.4%
Income taxes-161-62+160.7%-33-68-51.5%
Net income of consolidated companies75106-29.2%-247-157+57.3%
Share of profits (losses) of associates65+20.0%8-1nm
Income from continuing operations81111-27.0%-239-158+51.3%
Net income from discontinued operations00nm00nm
Net income for the period81111-26.4%-239-158+50.3%
Minority interest110.0%110.0%
Net income for the period – Group part80110-27.3%-240-159+50.9%

Consolidated Balance Sheet
Assets30 June 201931 Dec 2018
In million euros
Intangible assets1,2481,194
Flight equipment10,54110,167
Other property, plant and equipment1,5301,503
Right-of-use assets5,0795,243
Investments in equity associates305311
Pension assets174331
Other financial assets1,3841,487
Deferred tax assets441544
Other non-current assets242264
Total non-current assets21,16121,261
Assets held for sale00
Other short-term financial assets469325
Trade receivables2,5582,191
Other current assets1,2241,062
Cash and cash equivalents4,4183,585
Total current assets9,3717,796
Total assets30,53229,057

Liabilities and equity30 June 201931 Dec 2018
In million euros
Issued capital429429
Additional paid-in capital4,1394,139
Treasury shares-67-67
Reserves and retained earnings-3,327-3,051
Equity attributable to equity holders of Air France-KLM1,5771,853
Non-controlling interests1312
Total Equity1,5901,865
Pension provisions2,2852,098
Return obligation liability and other provisions3,0973,035
Financial debt5,9495,733
Lease debt3,4733,546
Deferred tax liabilities04
Other non-current liabilities293459
Total non-current liabilities15,09714,875
Return obligation liability and other provisions558492
Current portion of financial debt1,080826
Current portion of lease debt955989
Trade payables2,5002,460
Deferred revenue on ticket sales4,4073,153
Frequent flyer program837844
Other current liabilities3,5053,548
Bank overdrafts35
Total current liabilities13,84512,317
Total equity and liabilities30,53229,057

Statement of Consolidated Cash Flows from 1st January until 30th June 2019
In million euros30 June 201930 June 2018
Net income from continuing operations-239-158
Net income from discontinued operations00
Amortization, depreciation and operating provisions1,4751,442
Financial provisions8957
Loss (gain) on disposals of tangible and intangible assets-317
Loss (gain)on disposals of subsidiaries and associates-20
Derivatives – non monetary result24-23
Unrealized foreign exchange gains and losses, net52108
Other non-monetary items64-182
Share of (profits) losses of associates-81
Deferred taxes3061
Financial Capacity1,4541,313
Of which discontinued operations00
(Increase) / decrease in inventories-73-67
(Increase) / decrease in trade receivables-371-517
Increase / (decrease) in trade payables24163
Change in other receivables and payables1,2071,254
Change in working capital requirements787833
Change in working capital from discontinued operations00
Net cash flow from operating activities2,2412,146
Purchase of property, plant and equipment and intangible assets-1,464-1,534
Proceeds on disposal of property, plant and equipment and intangible assets7546
Proceeds on disposal of subsidiaries, of shares in non-controlled entities83
Acquisition of subsidiaries, of shares in non-controlled entities0-8
Dividends received73
Decrease (increase) in net investments, more than 3 months205
Net cash flow used in investing activities of discontinued operations00
Net cash flow used in investing activities-1,354-1,485
Increase of equity due to new convertible bond540
Perpetual (including premium)00
Issuance of debt762295
Repayment on financial debt-339-998
Payments on lease debt-501-517
Decrease (increase ) in loans, net-14-49
Dividends and coupons on perpetual paid-1-1
Net cash flow used in financing activities of discontinued operations00
Net cash flow from financing activities-39-1,270
Effect of exchange rate on cash and cash equivalents and bank overdrafts-138
Effect of exch. rate on cash and cash eq. and bank overdrafts of disc. ops.00
Change in cash and cash equivalents and bank overdrafts835-601
Cash and cash equivalents and bank overdrafts at beginning of period3,5804,667
Cash and cash equivalents and bank overdrafts at end of period4,4154,066
Change in treasury of discontinued operations00
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