Monday 27 March 2023

Pension charge pulls airline group Air France-KLM into the red

Air via Wikimedia Commons

A €1.4bn one-off charge to cure AirFrance-KLM’s pension position pulled the group into the red in 2017. The Franco-Dutch airline reported net losses of €274m for the year despite strong operating results, it said in a statement on Friday.

Excluding the charge, 2017 net earnings stood at €1.155bn, €363m higher than in 2016. AirFrance-KLM carried 99 million passengers last year, a 5.6% increase over the previous year. The group’s net debt was reduced by €2bn.

‘Air France-KLM closed 2017 with strong results boosted by a positive business environment. Thanks to the commitment of employees and the continuing focus on the quality of customer service, the group confirmed its leadership position in Europe in traffic terms while reporting an operating income increase of 42% and significantly improving its financial profile,’ said CEO Jean-Marc Janaillac.

The Dutch media reiterated that KLM fared better than Air France. ‘Once again KLM outperformed Air France,’ the Financieele Dagblad said. The Dutch unit raised pre-tax profit to €910m, an increase of €229m over 2016. KLM’s operational margin rose to 8.8%, compared to 3.7% for Air France, the FD said.

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