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Air France-KLM announced yet another full-year loss in its cargo operations.
However, there was a 1% improvement on 2015, at €244m.
Its fourth-quarter results fell 5% year-on-year to a loss of €28m, following a loss of €23m last year, despite improved market conditions at the end of last year, as volumes fell 5% on 4% less capacity.
But it is the last time the group will reveal the full cargo results separately. From next quarter, cargo reporting will be included in passenger network results, seemingly indicating a further downgrade of the group’s cargo business.
Cargo revenues for the year reached €2bn – down nearly 15% on the previous year, while capacity was cut by 4.9%.
“Cargo is still extremely difficult,” said CFO Pierre-François Riolacci, in an earnings call to analysts, adding that airlines around the world had low load factors, and that “competition is extremely strong”.
But CEO Jean-Marc Janaillac focused on the narrowed loss.
“We have been able to improve the result due to two things,” he said, noting the 24% reduction in the freighter fleet to just six. Losses on the freighters fell to €28m, from €42m.
He added that the carrier had also cut unit costs “impressively”. The ex-fuel unit cost fell 2.6%, like-for-like, as a result of restructuring, which was driven by a 6.7% cut in jobs.
Unit cost per ATK fell 10.2% year-on-year, to €0.15, but unit revenue per ATK fell 11.8% to €0.13.
“Cargo activity, after heavy restructuring, is in a position to make a contribution to the group,” he said.
In a statement, the carrier said: “The group continued to restructure its cargo activity, resulting in its gradual turnaround, in order to address the weak global trade and structural industry overcapacity, and to maximise its contribution.”
AF-KLM Group’s overall results saw operating income of €1bn, and a net result of €792m.