Air France-KLM quarterly loss widens to US$76.8 million as cargo falls

AIR FRANCE-KLM's posted a second quarter operating loss of EUR62 million (US$76.8 million) against a EUR14 million decline in 2011 as cargo revenue fell 4.4 per cent to EUR764 million on lack of demand and soaring fuel prices.

AF-KLM said first half cargo traffic fell 6.9 per cent in line with last year's 6.5 per cent year-on-year decline. In response, AF-KLM slashed capacity three per cent in the second quarter.

The carrier offered 2.5 per cent less cargo space in the first half of 2012 than in 2011, but capacity reductions did no offset utilisation, with cargo load factor falling 2.8 per cent to 64.5 percentage points.

But the passenger business did well in the second quarter with volume rising 2.4 per cent and 0.3 per cent year on year, respectively.

Quarterly net loss grew to EUR895 million against the EUR197 million loss suffered in 2011, partly attributable to the EUR368 million costs in effecting 5,000 layoffs.

"In an increasingly uncertain global environment, compounded by oil price and exchange-rate volatility, an improvement in our productivity and costs is even more necessary," said AF-KLM chairman Jean-Cyril Spinetta in a statement.