Due to travel restrictions and declining demand in the face of the spread of the coronavirus, the Air France-KLM group will reduce its activity by 70% to 90% in the next two months at least, management announced in a press release published this Monday.
The group's offer in seat kilometers offered, a measure of the calculation of the number of seats offered on an airline, "could drop between -70% and -90%", according to the group's press release which programmed this decrease "for a duration of 2 months ”. Air France-KLM "will continue to follow the evolution of the context on a daily basis to make it evolve if necessary".
The group plans "a severely degraded financial trajectory"
At the opening of the Paris Stock Exchange, the share of Air France-KLM fell by more than 17%. Air France will notably immobilize "its entire Airbus 380 fleet" and KLM "its entire Boeing 747 fleet". The group also forecasts "a greatly degraded financial trajectory" compared to the objectives announced when its latest results were published in late February. The group estimates that its decline in activity will only be compensated "to the tune of around 50% by the drop in variable costs before saving measures", according to the press release.
He also specifies that the group has already taken "strong measures" to "secure its cash", including 200 million euros in savings for 2020, the implementation of partial unemployment or a reduction of 350 million 'of its investment plan' to which will be added the impact of the drop in activity on the amount of maintenance investments'. Announced in February, this investment plan planned to mobilize 3.6 billion euros for 2020.
"Over € 6 billion in cash"
Finally, the group "last week drew a revolving line of credit for a total amount of 1.1 billion euros and KLM for its part drew a revolving line of credit for a total amount of 665 million euros" , and has, as of March 12, "more than € 6 billion in cash".
He concluded by explaining that he had "positively welcomed the declarations expressed by the French State and the Dutch State which indicated each to study all the possible conditions of support for the group". We must "ensure that Air France passes this difficult moment (...) in the best possible conditions", said Thursday the Minister of Economy Bruno Le Maire, after the announcement of the decision of Donald Trump to suspend the entry of Europeans to the United States.
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