Air France-KLM Group (AFRAF.PK) on Friday reported a net loss for the first quarter that widened from last year, reflecting unit revenue pressure and higher fuel costs that more than offset a decrease in unit costs.
Benjamin Smith, CEO of Air France-KLM Group CEO said, “As anticipated, the first quarter has been challenging for the European airline industry including the Air France-KLM Group, as substantial industry capacity growth in the off-peak business period led to unit revenue pressure.”
For the first quarter, net loss- Group part widened to 320 million euros from 269 million euros last year.
Loss from current operations increased to 303 million euros from 118 million euros loss in the year-ago period, when results were hurt by the Air France strike.
EBITDA for the quarter declined 31.7 percent to 424 million euros.
However, total revenues for the quarter grew 3.1 percent to 5.99 billion euros from 5.81 billion euros last year. The number of passengers increased 3.0 percent to 22.67 million.
Capacity in ASK grew 3.0 percent to 75.59 billion, mainly driven by the South American, North Atlantic and Asian networks. Passenger unit revenue per ASK, however, declined 1.2 percent to 6.17 euro cents, due to the Easter shift and substantial industry capacity growth in the winter.
On a constant currency and fuel price basis, unit costs were down 0.4 percent in the quarter, driven in particular by the decrease in customer compensations compared to year-ago period that was marked by the strikes in Air France.
Network revenue increased 1.7 percent to 5.18 billion euros. Total passenger network revenues were 4.63 billion euros, up 1.8 percent from last year. Load factor was 86.3 percent, down 0.4 percentage points.
Total cargo revenues increased 0.7 percent to 547 million euros, while cargo load factor declined 0.5 percentage points to 59.1 percent.
Looking ahead, the company said for fiscal 2019, it will pursue initiatives to reduce unit costs, with a targeted reduction for 2019 of between -1 percent to 0 percent at constant currency and fuel price. The company expects its fuel bill for the year to increase by 650 million euros to 5.6 billion euros.
As of this writing, in Paris, Air France-KLM shares are trading at 10.23 euros, down 0.07 euros or 0.68 percent.