The Air France-KLM Group announced net losses of €1.8 billion for the first quarter of 2020, as the coronavirus pandemic paralyzed its operations starting in March, and warned of even more disastrous consequences for its finances by summer.
The airline stated that in the first three months of the year, its capacity was reduced by 10.5% and estimates that in the second quarter, capacity will be reduced by approximately 95%, and by 80% in the third quarter compared to the same period last year.
Furthermore, due to the uncertainty regarding the duration of the Covid-19 crisis and its impact on the macroeconomic environment, the group decided to withdraw its previous forecasts for 2020.
The air transport sector is one of the economic sectors most affected by the coronavirus crisis, following travel restrictions and border closures decided globally to stop the spread of the virus.
For example, on May 3, 2020, the number of flights recorded in Europe was 91% lower than on the same day last year, according to the European Organisation for the Safety of Air Navigation (Eurocontrol).
The European Commission allowed France to grant support worth €7 billion to Air France; the aid will consist of a €4 billion loan granted by a syndicate of six banks, 90% guaranteed by the French state, as well as a €3 billion direct loan from the French state.
In turn, the Dutch government intends to assist KLM with €4 billion.
Frequently Asked Questions
What was Air France-KLM’s net loss in Q1 2020?The group reported a net loss of €1.8 billion for the first quarter of 2020 as the pandemic paralyzed global aviation operations.
How much state aid did Air France receive?The French government provided a €7 billion support package, consisting of a €4 billion bank loan and a €3 billion direct state loan.
What were the capacity reduction estimates for 2020?Following a 10.5% drop in Q1, the group estimated capacity reductions of 95% for Q2 and 80% for Q3 compared to the previous year.