The Board of Directors of Air France-KLM, chaired by Jean-Cyril Spinetta, met on May 2nd 2013 to examine the accounts for the first quarter of 2013. 

In a persistently tough economic environment, the group pursued its cost and debt reduction measures in this traditionally difficult quarter.

Activity
The passenger activity recorded a 0.8% rise in traffic for virtually stable capacity (+0.2%). The load factor gained 0.5 points to 82.1%. Unit revenue per available seat kilometre (RASK) rose by 1.2% (+1.3% ex-currency). Passenger revenues were up 1.4% to 4.49 billion euros. The operating result stood at -447 million euros (-515 million euros a year earlier).

The cargo activity, which continued to be affected by the economic slowdown and the situation of overcapacity in the industry, reduced capacity by 4.1%. With traffic down 6.9%, the load factor declined by 1.9 points to 63.0%. Unit revenue per available tonne kilometre (RATK) fell by 1.9%, and by 1.0% ex-currency. Cargo revenues amounted to 700 million euros (-5.9%). However, thanks to the Transform 2015 measures, the cargo loss was reduced to 50 million euros (70 million euros a year earlier).

Third party maintenance revenues stood at 302 million euros (+17.1%). The operating result amounted to 20 million euros (15 million euros at 31st March 2012). This improvement was mainly due to component maintenance. 

The other businesses generated revenues of 229 million euros, of which 134 million euros for the leisure business (+14.5%). The operating result stood at -53 million euros (-41 million euros at 31st March 2012).

Total revenues amounted to 5.72 billion euros, up 1.3% after a negative currency effect limited to 0.2%. Unit revenue measured in equivalent available seat kilometre (EASK) rose 0.5% (+0.7% at constant currency).

Reduction in unit costs
Unit costs measured in EASK were down 1.0% and 1.7% on a constant currency and fuel price basis for virtually stable production in EASK (+0.2%). 

Operating costs were stable (-0.1%) with the main changes as follows: 

• Despite a rise in the fuel price after hedging of 4%, the fuel bill was slightly down (-14 million euros to 1.67 billion euros) on the back of a 3% decline in volumes. 
• Employee costs fell 1.7% to 1.89 billion euros mainly reflecting the reduction in headcount (-41 million euros), a 13 million euro rise in non cash pension costs, a consolidation effect linked to the integration of Airlinair of 9 million euros and the French competitiveness tax credit (CICE, -10 million euros).
• Maintenance purchases increased by 12.0% to 309 million euros on the back of the increase in third party maintenance.

The operating result stood at -530 million euros, an improvement of 81 million euros on previous year. The adjusted operating result was -451 million euros (-535 million euros at 31st March 2012). 

Net interest charges amounted to 97 million euros (82 million euros at 31st March 2012). ‘Other financial income and costs’ stood at 51 million euros versus 276 million euros a year earlier. This decrease was mainly due to lower foreign exchange gains (down 50 million euros) and the change in the fair value of hedging instruments, which stood at 43 million euros at 31st March 2013 versus 220 million euros at 31st March 2012, reflecting the  decline in the oil price at the end of the period.

The net result, group share, stood at -630 million euros (-379 million euros at 31st March 2012). Earnings and diluted earnings per share stood at -2.13 euros (-1.28 euros at 31st March 2012).

Reduction in net debt
Investments amounted to 282 million euros with disposals at 108 million euros (416 million euros and 25 million euros respectively at 31st March 2012). Operating free cash-flow stood at 38 million euros in a traditionally negative quarter. At 31st March 2013, Air France-KLM had cash of 4.3 billion euros of which 547 million euros generated by the convertible bond issue. Elsewhere, the group has credit lines of 1.85 billion euros. 

As already indicated, the application of revised norm IAS19 on pension, and in particular the suppression of the corridor at 1st January 2013, led to a negative adjustment of shareholders’ funds of 1.33 billion euros at 31st December 2012. At 31st March 2013, shareholders’ funds reflected a positive trend in the return on plan assets and a revaluation of the discount rate amounting to 347 million euros, as well as various positive adjustments for 200 million euros. As a result, shareholders’ funds were stable (3.59 billion euros versus 3.64 billion euros at 31st December 2012). Net debt amounted to 5.90 billion euros (5.97 billion euros at 31st December 2012). The financial cover ratios were stable or slightly improved over the 12 months at 31st March 2013.

Outlook
In a difficult and uncertain environment, the group continues the implementation of Transform 2015 which remains on track.  It confirms its objectives for 2013, of a reduction in unit cost on a constant currency and fuel price basis, and a reduction of net debt.

Additional information
The accounts for the quarter January to March 2013 are not audited.
The results presentation will be available on www.aifranceklm-finance.com on May 3rd as of 07h15 CET.

Practical information

• A audio-web conference will be organized for press on Friday 4th May 2013 at 10:00 am (Paris/Amstelveen time), only in English.
• Any journalists who wish to listen in to the conference without asking questions are welcome

To connect

• dial  from France: 01 70 99 32 08 
• from others countries: + 44 (0)20 7162 00 25 password: AKH  
• To follow the presentation, go to: http://airfranceklm.viewontv.com/webcast/ 
• To listen to the recording, dial +33 (0)1 70 99 35 29 (code: 895689)

>> On the righthandside you wil find the complete overview (PDF) <<