Air France-KLM results speed up cost cuts

Revenues fall 2.4% in 2014 but passengers up 1.3%
Air France-KLM will accelerate cost cuts as it posted a fall in revenues of 2.4% in 2014 to €24.912 billion, even as passenger numbers rose by 1.3%.
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell €266 million to €1.589 billion – a bigger fall than many experts had predicted – pushed down by the impact of the recent pilots’ strike. Following three separate profit warnings during 2014, the airline group chose to give no profit forecast for 2015.
Besides further cost cuts under the recently launched Perform 2020 plan, Europe’s second-biggest traditional network carrier said it would slash planned investments and delay aircraft deliveries. It also said it was concerned about currency swings and overcapacity in some long-haul markets.
“With the way we see the market developing, except for the North Atlantic, we are being very, very cautious,” the group’s chief executive, Alexandre de Juniac, said.
Earlier this month, Air France’s chief executive, Frederic Gagey, insisted the loss-making French carrier was “not a bottomless pit” and that it was making progress on stabilising its finances. He dismissed reports in the Dutch media suggesting that KLM was taking a bigger hit from cost-cutting measures at the group.
Reuters / AFP
[image courtesy Air France]

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