The net loss of the Franco-Dutch airline group, published Thursday, is half that of 2020 (7.1 billion euros), but its net debt remains very high, at 8.2 billion.

While the sector hopes for a stronger recovery once the Omicron wave of Covid-19 has passed, which led to flight cancellations in January, Air France-KLM had a better than expected fourth quarter of 2021, with an operating profit of 178 million euros.

This is a higher result than during the corresponding period of 2019, before the crisis: thanks to the reopening of borders in Canada and then in the United States, the companies of the group saw their profitable long-haul routes resume vigor.

The return to the pre-pandemic situation is still a long way off.

With a first half of 2021 very affected by the Delta variant, the annual turnover only reached 14.3 billion euros.

That's 29% better than 2020, but still 47.5% below the 2019 level.

The last three months of the year still "represented a turning point for Air France-KLM", said the group's managing director, Benjamin Smith, quoted in a press release.

Despite a return to travel restrictions at the end of 2021 due to Omicron, "the overall performance reflects both the latent demand for travel and the result of our transformation efforts", he judged.

Faced with the crisis, the group has launched a drastic reduction in staff: 8,500 job cuts at Air France, of which 700 will take place this year, and 5,500 at KLM, as part of an all-out savings plan.

"The crisis is not over yet", but the visible recovery "makes us optimistic for the future", assured Mr. Smith, whose group has already given signs of long-term confidence by ordering Airbus at the end of December. no fewer than 100 A320neo family medium-haul aircraft.

Second recapitalization

For the first quarter of 2022, the group will deploy seating capacity at 73 to 78% of the 2019 level, and still wants to return to pre-crisis levels in 2024.

But he does not venture to give annual forecasts for 2022, “given the uncertainty regarding the health situation and the reopening of Japan and China”.

The current oil crisis also risks increasing its fuel bill, even if the group has partially protected itself by making purchases in advance.

In the meantime, Air France-KLM must continue to rebalance its accounts and has said it is ready to launch a new recapitalization operation, the second after that of April 2021, and which can also reach up to 4 billion euros.

The CEO of Air France-KLM Benjamin Smith, September 29, 2021 at Paris Roissy-Charles de Gaulle airport Eric PIERMONT AFP / Archives

Among the avenues considered is a capital increase for which the current shareholders, including the French State which currently holds 28.6% of the shares, would have priority.

The French and Dutch states could participate in this operation "in proportion" to their current participations, and "through partial compensation for the aid" they have granted, according to Air France-KLM.

During the first recapitalization, the French State had converted into quasi-equity 3 billion euros of loans and participated in a capital increase of one billion euros.

For this new operation, the start date of which is not yet known, Air France-KLM also mentions the issue of "perpetual bonds" to "accelerate the reimbursement of state aid" which enabled it to survive the start of the crisis.

This aid has indeed been subject to conditions by the European Commission, limiting the group's ability to make acquisitions at a time when many aviation players are coming out of the crisis very weak.

This new step aims to reduce net debt to double gross operating surplus by 2023, a ratio scrutinized by investors because it reflects the company's ability to honor its debts.

In the immediate future, Air France-KLM assured not to have cash flow problems with 10.2 billion euros of cash and credit lines available.

© 2022 AFP