Paris (AFP)

Almost zero activity in April and May, followed by a sluggish restart: the Air France-KLM group suffered a loss of 2.6 billion euros in the second quarter and viewed the summer with caution given the uncertainties associated with the evolution of Covid-19.

In June, activity was 8% compared to last year and the companies in the group "are cautiously increasing their capacity for the summer months," the group said in a statement.

"Visibility on the recovery curve in demand is limited because the booking behavior of customers is much more oriented towards the short term than before the Covid-19 crisis, in particular on the long-haul network" subject to policies government border openings.

Domestic flights were able to resume as well as in Europe between most countries but the situation is more complex for long-haul flights as the coronavirus pandemic on Thursday reached a new milestone with more than 17 million infections, including more half in three countries (United States, Brazil, India).

Travelers prefer to wait until the last minute to make their reservations and the "recovery of business class is taking place more slowly than tourism," explained the group's financial director Frédéric Gagey, during a conference call with journalists.

For the month of September for example, the group had, last year at the same period, already sold 52% of the medium-haul seats against only 18% this year, he said.

In the third quarter, the group will offer an offer of only 45% compared to the same period last year and 65% in the fourth quarter.

"But these capacities will be reviewed at any time depending on the evolution of the crisis," warned Mr. Gagey.

The group's baseline scenario plans to operate in 2021 a supply reduced by at least 20% compared to 2019.

The professionals of the sector, stunned by the Covid-19 which grounded almost the entire world fleet during the peak of the crisis, are betting on a return of activity to the pre-crisis level in 2024.

- "Unprecedented impact" -

"The results of the second quarter reflect the unprecedented impact of the Covid-19 crisis on the group's activity," said CEO Benjamin Smith, quoted in the press release, specifying that "the cost reduction measures and quickly implemented liquidity preservation have nevertheless made it possible to reduce "operational losses.

He praised "the exceptional support from the French and Dutch governments".

"The road to recovery will be long and fraught with uncertainties. Even if we have already done a lot, other important measures will unfortunately be inevitable", commented KLM CEO Pieter Elbers referring to this first half-year, "the worst setback financial experience never experienced by KLM in its entire history ".

In the first half of the year Air France and KLM recorded operating losses of 1.594 billion euros and 768 million euros respectively.

As of June 30, the group had 14.2 billion in cash or lines of credit, including 10.4 billion in direct or guaranteed loans granted by France and the Netherlands (7 billion by France and 3.4 billion by the Netherlands), said Group CFO Frédéric Gagey.

Air France-KLM management has initiated a plan to "rebuild" the group after the Covid-19 crisis which will involve a 40% reduction in the French network - on which Air France lost 200 million euros in 2019 - and the elimination of 7,580 jobs by the end of 2022, ie 16% of Air France's workforce and 42% of those of Hop! which provides domestic connections.

In the Netherlands, "KLM's restructuring plan foresees a significant reduction" in the number of jobs and the Dutch company "has already launched a voluntary departure plan to which 2,000 employees (in full-time equivalent) have subscribed by the deadline closing, ”the group said on Thursday.

© 2020 AFP