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Air France-KLM Posts Record LossMay 20, 2010 By: Jena Tesse Fox
One year ago, 228 people died in the crash of Flight 447 off the coast of Brazil. Since then, the Franco-Dutch carrier said that its revenues had fallen 15 percent to $26.6 billion as passengers shifted to low-cost carriers and downgraded from business to economy class.
CEO Pierre-Henri Gourgeon said that “2009-10 will go on record as our ‘annus horribilis.’” Still, he seemed optimistic about the coming year, despite the devastating closure of European airspace because of volcanic ash costing $330 million in lost revenue. He expected a break-even operating profit after excluding the cost of fuel hedges from its balance sheet.
He also said that the airline’s cost-cutting program had begun to reap rewards and that recent weeks had brought the first signs of recovery. It hopes to make savings of more than $1 billion over two years under a plan that will cut 3,600 jobs.