Airline recovery keeps going
Air France-KLM has signalled that a turnaround that began early in 2017 is continuing as bookings rise and tourists from Asia and the US return to France after staying away in 2016.
Air France-KLM has signalled that a turnaround that began early in 2017 is continuing as summer bookings rise and tourists from Asia and the US return to France after staying away in 2016.
“The second quarter is good and bookings for this summer are also quite positive compared to last year,” CEO Jean-Marc Janaillac said, calling the increase in bookings “healthy”.
Air France-KLM is only just recovering from the collapse in travel that followed terrorist attacks in Paris and Nice over the past two years.
“We suffered from terrorist attacks, especially in 2016, but we have recovered this year. Visitors from the US and China and Japan are coming back,” Janaillac said. “This year we came back to the situation of two years ago and a bit more. We are quite hopeful that during the next year we are going to keep on increasing our visitors from overseas.”
Air France-KLM will report June traffic bookings on Monday and will publish results for the second quarter on July 28.
Janaillac, who took the helm of the airline in 2016, has a mandate to improve profit after years of losses and a series of costly strikes. The surge in traffic comes as the company is waiting for its main pilot union to give its opinion on a plan that includes the creation of Boost, a temporary name for a new, lower-cost long and mediumhaul carrier. The union is consulting members on the plan.
The remarks show just how much prospects have changed since December, when Janaillac gave a downbeat assessment, warning against the challenges of weak margins, rising fuel prices and high debt. Air FranceKLM shares have more than doubled in 2017.
The airline executive cautioned that the recovery did not mean Air-France could forgo changes to its business model or the creation of Boost. Passenger numbers at the Air France arm dropped 1.4% in 2016 and the group relied on Transavia and Dutch KLM for gains. “Our goal is to find the ways of profitable growth,” he said. “Boost is a way to get back to 3% per year in long-haul growth.”