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More cost-cutting from loss-making AF-KL

AMSTERDAM/PARIS: The Air France KLM Group has reported revenue of €12.3 billion for the first six months of 2015 – an increase of 2.4 percent year-on-year.

The operating result widened from -€207 million to -€232 million during the period to increase the net loss from -€619 million to -€638 million. Net debt fell €857 million to €4.55 billion.

Individual airline performance saw Air France reduce its operating result from -€180 million to -€129 million on a 2.6 percent increase in revenue to €7.8 billion. KLM improved its result for the first six months by €51 million to - €129 million on revenue of €4.6 billion, a rise of 2.2 percent year-on-year.

KLM B787-9Group chairman Alexandre de Juniac cited "exceptional volatility in exchange rates and the fuel price, and by on-going pressure on unit revenues" as the reason for the continued losses.

He announced "immediate additional adaptation measures including, in particular, the closure of heavily loss-making routes, the downward revision in capacity for the forthcoming Winter season, together with an acceleration and an increase in the magnitude of our cost-saving initiatives."

Acknowledging the recent agreement between KLM and its labor unions, de Juniac said a deal with Air France's unions by September would be key to improving the group's financial future: "At this pivotal moment in Air France-KLM's history, the board and I know that we can count on the spirit of responsibility and commitment shared by all the group's staff to enable us to return to a growth path."

Group cargo revenue fell 16.1 percent for the period to €1.3 billion, increasing the net loss figure from -€79 million to -€141 million.

The group said weak global trade and industry overcapacity contributed to the increased loss as, despite a reduction of 26 percent in full-freighter capacity, revenue per available ton-kilometer fell 13.8 percent compared to the same period in 2014.

By the end of 2016 Air France KLM said the group's freighter capacity would be reduced to three KLM B747s and two Air France B777s. "This reduction should enable the full-freighter business to return to operating breakeven in 2017, " it added.

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