The global pandemic will have had a very strong impact on the finances of the airline company Air France-KLM. In 2020, the latter’s losses were estimated at 7.1 billion euros.
The Covid-19 at the origin of these staggering losses
The Franco-Dutch airline, Air France-KLM published Thursday, February 18, 2021, the catastrophic figures for its year 2020. In its press release, the group announced that in 2020, the company had experienced an “unprecedented” shock to its finances due to the Covid-19 health crisis. In 2020, Air-France KLM lost 7.5 billion euros. Compared to 2019, the company’s revenue collapsed by 59%.
Air France-KLM Chief Financial Officer Frédéric Gage said in the company’s press release that this plunge in the company’s turnover “ make you dizzy “. The group warns that the year 2021 will not be easy for the airline either. Thus, according to the report, the first quarter will still remain “difficult” due to travel restrictions. However, the prospect of a rebound in the second and third quarters is taken into account by Air France-KLM, which believes that the vaccination campaigns would allow a gradual return of air traffic.
Health crisis and oil crisis at the origin of this loss of 7.1 billion euros
The Covid-19 health crisis which paralyzed the world in 2020 and continues in 2021 is at the origin of the colossal financial worries of Air France-KLM. The abrupt stop of travel due to containment measures around the world caused the airline to lose 67.3% of its 2019 passengers. A fall which continues since the “reinforced travel restrictions” which continue in 2021 raise fears of a loss of 60% of the passengers of 2019 in the first quarter of 2021.
The oil crisis also had a very negative impact on the finances of the Franco-Dutch group. Having anticipated its kerosene purchases for the year in order to plan costs, Air France-KLM lost 595 million when the oil price collapsed.
Faced with this unprecedented crisis, the airline is going to reduce its workforce. Despite the direct or guaranteed loans granted to the group of 10 billion euros by the French and Dutch governments, Air France has already reduced its workforce by 10% in 2020. A reduction which is not intended to stop since ” plans underway will still support around 900 departures at KLM and around 4,900 at Air France “.