PARIS (dpa-AFX) - Air France-KLM (AFLYY.PK, AFRAF.PK) reported Thursday a net profit for its fourth quarter, compared to prior year's hefty loss, with improved passenger revenues, despite a 14-day pilot strike. Going ahead, the Franco-Dutch carrier said it is challenging to meet medium term targets, and also slashed its investment plan. The shares were losing around 5 percent in the morning trading in Paris.
The company said the strike by Air France pilots led the firm to cancel 4,249 million Available Seat Kilometer or ASKs and 213 million ATKs. This resulted in an estimated negative impact of 425 million euros on the operating result, and revenues were reduced by 495 million euros in the quarter.
According to the firm, the global context in early 2015 remains uncertain, and almost all of the expected savings on the fuel bill could be offset by unit revenue pressure and negative currency impacts.
Under these conditions, the company has decided to reinforce the measures planned within the framework of Perform 2020. The 2015-16 investment plan was scaled back by 600 million euros, comprising 300 million euros in 2015 and 300 million euros in 2016.
Air France-KLM also announced the immediate implementation of further measures at Air France including new Voluntary Departure Plans targeting 800 full-time equivalents. Further, 2015-17 unit cost reduction target was revised up to 'an average of 1.5 percent per year' from 'between 1 percent and 1.5 percent per year' announced in September 2014.
The company said it is challenging to achieve its medium-term -2017- financial targets of 8 to 10 percent EBITDAR growth amid the significant fall in fuel prices, the increased volatility of currencies and unit revenues, and the impact of the pilot strike.
In consequence, the company will focus for now on its reinforced average 1.5 percent annual unit cost reduction efforts.
For the fourth quarter, net result, group share, was 316 million euros or 0.78 euro per share, compared to prior year's loss of 1.18 billion euros or 3.97 euros per share.
The prior year results have been restated, the company said.
Adjusted net result, group share, which excluded certain items, was loss of 304 million euros or 1.03 euros per share, compared to loss of 149 million euros a year ago.
Earnings before interest, tax, depreciation and amortization or EBITDA was 316 million euros, compared to 382 million euros in the prior year. Excluding the impact of the Air France pilot strike, EBITDA was 411 million euros, up 29 million euros from last year, and EBITDA margin improved 0.4 points to 6.6 percent.
Revenues were up 1.5 percent to 6.21 billion euros from 6.12 billion euros last year. On a like-for-like basis, revenues edged down 0.5 percent.
The number of passengers grew 2.8 percent to 21.047 million from last year's 20.48 million, and passenger revenues increased 0.3 percent to 4.86 billion euros. Capacity also improved 0.5 percent to 81.57 billion EASKs.
The company noted that the momentum in net debt reduction was slowed by the Air France pilot strike and the weaker unit revenues observed since Summer 2014.
Looking ahead, for full year 2015, the company targets a unit cost reduction of 1 percent to 1.3 percent, equivalent to 250 to 350 million euros of savings, and net debt around 5 billion euros at the end of 2015, taking into account the financial impact of the pilot strike.
In Paris, Air France-KLM shares were losing 4.77 percent to trade at 7.23 euros.
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