AF-KLM soars back into the black

Rebound in air cargo demand sees sister carriers hit target a year ahead of expectations

Air France-KLM said this week that a strong rebound in its air cargo business had endorsed the company’s strategy of placing more focus on utilising belly space on its passenger and combi aircraft.

The carrier group posted a full-year operating profit of €69 million (US$98.6m) in its cargo business – a dramatic swing of more than €500 million on the previous year.

This, together with improved profits in its maintenance business and the wiping out of almost all its passenger business losses, helped the group post an operating profit of €122 million for the year to March 2011. This follows losses of €1.28 billion in the previous year.

Commenting on the figures during its annual results press conference in Paris, Air France-KLM Chief Executive Pierre-Henri Gourgeon said: “It completely validates the strategy to fill the belly space of the passenger and combi aircraft.”

Europe’s largest airline group, by traffic, has reduced its freighter fleet from 25 to 15, and it now accounts for just one-third of its overall cargo capacity – the majority comprising belly and combi aircraft space.

The operator had been targeting a more conservative halving of the €436 million cargo losses it incurred in the 2009/10 financial year.

Air France-KLM warned in February that it would miss a targeted improvement in its operating profit due to the unrest in north Africa and the Middle East, the disaster in Japan and weaker-than-expected fourth-quarter revenues after its Skyteam alliance partner, Delta, flooded the transatlantic market with capacity.

But in a strong recovery year for air freight traffic, KLM CEO Peter Hartman said: “We returned to the black [in cargo] a year ahead of our expectations.” (source: IFW)

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