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Air France-KLM Second Quarter 2021 results

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July 30, 2021

SECOND QUARTER 2021
Operating result at -752 million euros, EBITDA at -248 million euros
Adjusted operating free cash flow positive at 210 million euros
thanks to strong ticket sales

The Group’s results improved compared to last year; although still impacted by travel restrictions:

  • Revenue at 2,750 million euros, up 1,568 million compared to last year

  • Operating result at -752 million euros, up 801 million euros compared to last year

  • EBITDA loss reduced to -248 million euros

  • Net income at -1,489 million euros, including negative impact of the derecognition of the KLM ground pension fund

  • Restructuring programs showing improved results and structural benefits increased to 2.1 billion euros

  • The group increased its capital by 1 billion euros, converted the direct French State loan of 3 billion euros into perpetual hybrid instruments and issued a Senior bond of 800 million euros of which the cash will be received in the Third quarter

  • Net debt at 8.3 billion euros, down by 2.7 billion euros compared to end of 2020 thanks to the first set of capital strengthening measures

OUTLOOK

Since June, first signs of recovery are visible in the booking trend thanks to waived or eased travel restrictions in Europe due to the rise of vaccination rate across all countries. The reopening of the North Atlantic for americans citizens to visit Europe also resulted in an improved booking trend.

In this context, the Group expects capacity in Available Seat Kilometers for Air France-KLM Network passenger activity at index in the range of 60% to 70% in the Third quarter 2021 compared to 2019.

Due to the uncertainty of the reopening of the North Atlantic for European citizens and uncertainty concerning travel restrictions waiving, no capacity guidance will be provided for the Fourth quarter 2021.

The Air France-KLM Group continues to focus on its transformation projects in order to reduce its costs and on cash and equity. During the Annual General Meeting in May 2021, extraordinary resolutions were approved by the shareholders, providing the Board of Directors large flexibility to restore equity. These resolutions could include instruments such as rights issuance, vanilla quasi-equity and equity-linked instruments in order to restore balance sheet and re-profile debt redemptions.

Early July, Air France-KLM signed and executed an EMTN Program for a total issuance size of 4.5 billion euros.

Air France-KLM Group

Second quarter

Half year

2021

Change1

2021

Change

Passengers (thousands)

7,028

+477.1%

11,847

-38.7%

Passenger Unit revenue per ASK2 (€ cts)

3.83

+0.8%

3.39

-37.6%

Operating result (€m)

-752

+801

-1,931

+437

Net income – Group part (€m)

-1,489

+1,123

-2,970

+1,443

Adj. operating free cash flow (€m)

210

+1,711

-1,134

+1,193

Net debt at end of period3 (€m)

8,344

-2,705

The Board of Directors of Air France-KLM, chaired by Anne-Marie Couderc, met on July 29, 2021 to approve the financial statements for the First Half 2021. Group CEO Mr. Benjamin Smith said:
Thanks to the easing of travel restrictions in several key regions, the Second quarter of 2021 saw the first signs of the long-awaited recovery. Travelers were able to take the skies again and Air France-KLM’s voluntarist approach in terms of capacities - combined with the Group’s balanced network and efficient hubs - proved conclusive. Reciprocity of borders reopening and the acceleration of the vaccination roll-out worldwide, especially in the context of the rise of the Delta variant, will play a key role in maintaining this momentum.” said Benjamin Smith, CEO of Air France-KLM. “To make the most of the recovery and prepare for the future, Air France-KLM continued its transformation across all businesses and notably reinforced its sustainability efforts to lead the way to sustainable aviation.

Business review

Network: Recovery visible only in June while Cargo continued to perform strongly

Network

Second quarter

Half year

2021

Change

Change
constant currency

2021

Change

Change
constant currency

Total revenues (€m)

2,363

+151.8%

+158.3%

4,221

-19.1%

-17.1%

Scheduled revenues (€m)

2,187

+164.5%

+171.6%

3,899

-20.4%

-18.2%

Operating result (€m)

-654

+469

+477

-1,715

+137

+127

Second quarter 2021 revenues increased by 158.3% at constant currency to 2.363 million euros. The operating result amounted to -654 million euros, a 477 million euros increase at constant currency compared to last year.

Passenger network: Caribbean & Indian Ocean, Africa & Middle East, Europe and French Domestic as the most resilient areas

Second quarter

Half year

Passenger network

2021

Change

Change
constant currency

2021

Change

Change
constant currency

Passengers (thousands)

5,853

+418.9%

10,321

-38.9%

Capacity (ASK m)

36,417

+315.5%

70,003

-1.6%

Traffic (RPK m)

15,930

+388.5%

29,363

-44.7%

Load factor

43.7%

+6.5 pt

41.9%

-32.7 pt

Total passenger revenues (€m)

1,468

+294.5%

+301.7%

2,487

-40.5%

-39.3%

Scheduled passenger revenues (€m)

1,392

+315.2%

+324.3%

2,356

-41.2%

-39.7%

Unit revenue per ASK (€ cts)

3.82

-0.1%

+2.1%

3.37

-40.2%

-38.7%

Last year Second quarter, the passenger network activity was heavily impacted by the Covid-19 crisis and came almost to a standstill. This year, the capacity in Available Seat Kilometers in the Second quarter was 315.5% higher than last year, however at 48% of 2019 Second quarter levels. Thanks to the Group’s balanced network and strong Cargo performance, the passenger network was in line with the Group’s guidance provided during First quarter 2021 results presentation.
Antilles, Greece and French domestic were amongst the best performing routes. Again, this quarter the Group operated more capacity than its main European competitors did.

During the Second quarter, Air France added three Airbus 350-900 to the fleet and KLM Cityhopper welcomed two Embraer 195 E2 into its fleet. With these investments, the Group continues to build an efficient fleet and shows its sustainable commitment.

Continuation of strong performance by Cargo

Second quarter

Half year

Cargo business

2021

Change

Change
constant currency

2021

Change

Change
constant currency

Tons (thousands)

273

+83.4%

541

+38.2%

Capacity (ATK m)

2,623

+66.0%

5,311

+11.3%

Traffic (RTK m)

2,092

+77.5%

4,166

+38.4%

Load factor

79.8%

+5.2 pt

78.4%

+15.3 pt

Total Cargo revenues (€m)

894

+58.1%

+63.0%

1,733

+67.9%

+74.0%

Scheduled cargo revenues (€m)

795

+62.0%

+66.9%

1,543

+73.4%

+79.5%

Unit revenue per ATK (€ cts )

30.31

-2.4%

+0.5%

29.06

+55.8%

+61.3%

Compared to the Second quarter in 2020, capacity increased by 66% in Available Ton Kilometers. Despite this increase in capacity, the Load factor gained 5.2 points and the unit revenue per ATK at constant currency improved by 0.5%. Compared to 2019, a still limited cargo capacity is available while the demand remains high resulting in high Revenue Ton Kilometers and Revenues.

At the moment, the Group transports more than 100 shipments of Covid-19 vaccines per month. The distribution of vaccines continues to gradually increase and the Group expects further growth in the Third quarter, notably to Africa and South America.

During the First half year of 2021, the Sustainable Aviation Fuel (SAF) Cargo program welcomed 22 partners, showing the sustainable commitment of Air France-KLM Cargo and its partners.

Transavia operating loss in the Second quarter 2021 at -98 million euros

Second quarter

Half year

Transavia

2021

Change

2021

Change

Passengers (thousands)

1,175

+1,208.9%

1,527

-37.4%

Capacity (ASK m)

3,240

+1,069.2%

4,251

-17.8%

Traffic (RPK m)

1,939

+972.0%

2,522

-45.6%

Load factor

59.9%

-5.4 pt

59.3%

-30.4 pt

Total passenger revenues (€m)

126

+655.4%

163

-37.1%

Unit revenue per ASK (€ cts)

3.88

-29.0%

3.83

-19.1%

Unit cost per ASK (€ cts)

6.90

-84.8%

8.96

+5.9%

Operating result (€m)

-98

+13

-218

-25

The Second quarter operating result ended at an operational loss of -98 million euros, because of the ongoing travel restrictions in Europe and North Africa. As the production levels in the Second quarter of last year were close to zero due to an almost full production freeze, the activity level in the Second quarter 2021 was around ten times higher than last year. On this increased capacity, the load factor lost 5.4 point compared to last year at a level of 59.9%.

In the first half of 2021, the number of aircraft of Transavia increased by nine as part of the growth strategy for Transavia France. Transavia is well positioned to capture the leisure traffic recovery, seen since June, being a major opportunity for the Group’s competitiveness gain.


Maintenance business operating result for Second quarter 2021 around breakeven

Second quarter

Half year

Maintenance

2021

Change

Change
constant currency

2021

Change

Change
constant currency

Total revenues (€m)

679

+35.5%

1,302

-20.6%

Third-party revenues (€m)

255

+14.9%

+31.0%

514

-28.3%

-18.5%

Operating result (€m)

-3

315

319

-10

311

329

Operating margin (%)

-0.4%

+63.0 pt

+68.0 pt

-0.8%

+18.8 pt

+21.1 pt

The Second quarter operating result stood at -3 million euros, an increase of 319 million euros against a constant currency versus the Second quarter 2020.

In the Second quarter of 2020, the maintenance business recorded one offs linked to the Covid-19 crisis amounting to 203 million euros; excluding one offs effect, the operating result increase in the Second quarter this year is mainly explained by operational improvement and cost savings.

Total revenues increased by 35.5% in the Second quarter while third party revenues rose by 14.9% and internal revenues increased by 51.9%. This increase in internal revenues is mainly related to an increase in flight hours compared to the very low flight hours during the Second quarter 2020. The rise in external revenues is mainly driven by the components business.

Air France-KLM Group: EBITDA loss reduced to -0.2 billion euros

Second quarter

Half year

2021

Change

Change
constant currency

2021

Change

Change
constant currency

Capacity (ASK m)

39,657

+338.6%

74,254

-2.7%

Traffic (RPK m)

17,869

+419.2%

31,884

-44.8%

Passenger unit revenue per ASK (€ cts)

3.83

-1.2%

+0.8%

3.39

-39.1%

-37.6%

Group unit revenue per ASK (€ cts)

5.83

-37.4%

-35.7%

5.47

-18.8%

-16.7%

Group unit cost per ASK (€ cts) at constant fuel

7.73

-70.8%

-70.8%

8.07

-17.9%

-14.2%

Revenues (€m)

2,750

+132.7%

+143.1%

4,910

-20.8%

-18.0%

EBITDA (€m)

-248

+532

+539

-874

-34

-26

Operating result (€m)

-752

+801

+808

-1,931

+437

+442

Operating margin (%)

-27.3%

+104.0 pt

+109.4 pt

-39.3%

-1.1 pt

+0.1 pt

Net income - Group part (€m)

-1,489

+1,123

-2,970

+1,443

In the Second quarter 2021, the Air France-KLM Group posted an operating result of -752 million euros, up by 801 million euros compared to last year.

Net income amounted to -1,489 million euros in the Second quarter 2021, an increase of 1,123 million euros compared to last year. Last year Second quarter was heavily impacted by the recording of exceptional accounting items due to Covid-19 (impairment for acceleration phase-out Airbus 380s and Airbus 340s, fuel “over hedge” and a restructuring costs provision for the Air France and KLM voluntary departure plans).

Following the conversion of KLM defined benefit pension schemes into collective defined contribution schemes for Cockpit and Cabin staff in 2017, now also the KLM ground staff pension fund moved to a defined contribution scheme. This lead to more predictable annual contributions and less volatility on the Group’s Balance Sheet. Mainly due to the derecognition of the KLM ground staff pension fund the other non-current income and expenses showed in Q2 a negative amount of 849 million euros.

The Second quarter 2021 unit cost decreased by 71%, primarily caused by an increase of capacity

On a constant currency and fuel price basis, unit costs were down 71% in the Second quarter 2021.

All cost items, except other external expenses, increased in the Second quarter 2021 compared to last year due to an increase in capacity of 338.6%.
Group net employee cost were up 21.8% mainly due to less government support. The FTE reduction did not compensate fully this gap as indicated during the fourth quarter 2020 results presentation.

Second quarter: Adjusted Operating Free cash flow positive. Change in Working Capital Requirement driven by improved advanced ticket sales

Second quarter

Half year

In € million

2021

Change

2021

Change

Cash flow before change in WCR and Voluntary Departure Plans, continuing operations (€m)

-417

+744

-1,162

+169

Cash out related to Voluntary Departure Plans (€m)

-80

-74

-125

-110

Change in Working Capital Requirement (WCR) (€m)

1,211

+1,129

1,120

+577

Net cash flow from operating activities (€m)

714

+1,799

-167

+636

Net investments* (€m)

-287

-33

-534

+578

Operating free cash flow (€m)

427

+1,766

-701

+1,214

Repayment of lease debt

-217

-55

-433

-21

Adjusted operating free cash flow**

210

+1,711

-1,134

+1,193

* Sum of ‘Purchase of property, plant and equipment and intangible assets’ and ‘Proceeds on disposal of property, plant and equipment and intangible assets’ as presented in the consolidated cash flow statement.

** The “Adjusted operating free cash flowis operating free cash flow after deducting the repayment of lease debt.

The Group generated adjusted operating free cash flow in the Second quarter 2021 of 210 million euros, an increase of 1,711 million euros compared to last year, mainly driven by improved advanced tickets sales.

In million

30 Jun 2021

31 Dec 2020

Net debt

8,344

11,049

EBITDA trailing 12 months

-1,723

-1,689

Net debt/EBITDA trailing 12 months

na

na

Q2: Performance improved versus last year although still negatively impacted by travel restrictions

Second quarter

Half year

2021

Change

2021

Change

Air France Group Operating result (€m)

-566

+492

-1,406

+188

Operating margin (%)

-34.4%

+155.1 pt

-47.1%

-2.5 pt

KLM Group Operating result (€m)

-185

+308

-522

+246

Operating margin (%)

-15.3%

+55.0 pt

-24.4%

+2.6 pt

OUTLOOK

Since June, first signs of recovery are visible in the booking trend thanks to waived or eased travel restrictions in Europe due to the rise of vaccination rate across all countries. The reopening of the North Atlantic for American citizens to visit Europe also resulted in an improved booking trend.

In this context, the Group expects capacity in Available Seat kilometers for Air France-KLM Network passenger activity at index in the range of 60% to 70% in the Third quarter 2021 compared to 2019.

Due to the uncertainty of the reopening of the North Atlantic for European citizens and uncertainty concerning travel restrictions waiving, no capacity guidance will be provided for the Fourth quarter 2021.

As of June 30, 2021, the Group has 9.4 billion euros of liquidity and credit lines at disposal, the Senior bond of 800 million euros issued by the end of June is not included in this amount yet. This level can be considered comfortable, given the first signs of recovery and the cash requirements for 2021, which include:

  • Third quarter 2021 EBITDA expected to be positive

  • Net Capex spending expected below 2.0 billion euros in 2021, and largely funded for fleet investments

  • Restructuring cash out below 500 million euros in 2021, part of which is compensated by the associated reduction in the salary cost

The Air France-KLM Group continues to focus on its transformation projects in order to reduce its costs and on cash and equity. During the Annual General Meeting in May 2021, extraordinary resolutions were approved by the shareholders, providing the Board of Directors large flexibility to restore equity. These resolutions could include instruments such as rights issuance, vanilla quasi-equity and equity-linked instruments in order to restore balance sheet and re-profile debt redemptions.

Guidance: Air France-KLM Group medium term operating margin objective unchanged

The Group accelerates its transformation initiatives and confirms its medium-term financial ambition. Air France-KLM continues to balance its medium-term focus on managing liquidity with the long-term focus on achieving increased competitiveness. To do this, the Group continues to optimize fleet, workforce, network, costs and reinforce his sustainability efforts.

Air France-KLM estimates the number of aircraft in 2022 to be 7% below the number of aircraft in 2019. The Group expects capacity in Available Seat Kilometers back to the 2019 levels in 2024.

By the end of June 2021, KLM managed to decrease the number of FTE by 5,700 compared to December 2019. In Air France (excluding Transavia France subsidiary), the number of FTE decreased by 5,300 end of June 2021 compared to December 2019. The voluntary departure plan continues at Air France (excluding Transavia France), and an additional 3,200 FTE will leave the company by end 2022.
Operating costs will being reduced in 2021 and beyond, with 800 million euros structural benefits for KLM end 2021 and 1.3 billion euros end 2022 for Air France versus 2019.

The reduction in FTE, amongst other key transformation initiatives, will drive the unit cost down 8% to 10% (Unit cost including fuel and currency change assumptions) once capacity is back to 2019 level.

The Group’s medium-term financial ambition is maintained with an Adjusted Operating Free Cash Flow expected to be positive in 2023. The Operating Margin mid-cycle objective is still estimated at 7% to 8%.

The Net debt/EBITDA target ratio of circa 3x in 2023 will be lowered to circa 2x after the expected second step of recapitalization.

Early July, Air France-KLM signed and executed an EMTN Program for a total issuance size of 4.5 billion euros, to fully support and optimize its overall financing strategy, and opportunistically make use of debt capital market windows through private and public bond issuances. Société Générale is acting as Arranger to the Programme alongside five dealers: CACIB, Deutsche Bank, HSBC, Natixis and Santander. Gide Loyrette Nouel acted as Legal Advisor to Air France-KLM and Allen & Overy as Legal Advisor to the group of dealers.

******

The external auditors carried out limited review procedures. Their limited review report was issued following the Board meeting.

The results presentation is available at www.airfranceklm.com on July 30, 2021 from 7:15 am CET.

A conference call hosted by Mr. Smith (CEO) and Mr. Zaat (CFO) will be held on July 30, 2021 at 08.30 CET.

To connect to the conference call, please dial:

France: Local +33 (0)1 70 72 25 50
Netherlands: Local +31 (0) 20 721 9251
UK: Local +44 (0)330 336 9126
US: Local +1 323-794-2597

Confirmation code: 4260430

Investor Relations Press
Olivier Gall Michiel Klinkers
+33 1 49 89 52 59 +33 1 49 89 52 60 +33 1 41 56 56 00
olgall@airfranceklm.com Michiel.klinkers@airfranceklm.com

Income Statement

Second quarter

Half year

€m

2021

2020

Change

2021

2020

Change

Sales

2,750

1,182

+132.5%

4,910

6,201

-20.8%

Other revenues

0

0

nm

0

0

nm

Revenues

2,750

1,182

+132.5%

4,910

6,201

-20.8%

Aircraft fuel

-520

-213

+144.1%

-982

-1,397

-29.7%

Chartering costs

-78

-24

+225.0%

-147

-114

+28.9%

Landing fees and route charges

-245

-91

+169.2%

-460

-478

-3.8%

Catering

-68

-14

+385.7%

-126

-178

-29.2%

Handling charges and other operating costs

-211

-82

+157.3%

-402

-441

-8.8%

Aircraft maintenance costs

-447

-298

+50.0%

-792

-912

-13.2%

Commercial and distribution costs

-72

-36

+100.0%

-131

-230

-43.0%

Other external expenses

-254

-270

-5.9%

-552

-673

-18.0%

Salaries and related costs

-1,237

-1,016

+21.8%

-2,403

-2,931

-18.0%

Taxes other than income taxes

-29

-24

+20.8%

-69

-80

-13.8%

Other income and expenses

163

106

+53.8%

280

393

-28.8%

EBITDA

-248

-780

-68.2%

-874

-840

+4.0%

Amortization, depreciation and provisions

-504

-773

-34.8%

-1,057

-1,528

-30.8%

Income from current operations

-752

-1,553

-51.6%

-1,931

-2,368

-18.5%

Sales of aircraft equipment

-11

25

nm

-14

24

nm

Other non-current income and expenses

-849

-809

+4.9%

-853

-854

-0%

Income from operating activities

-1,612

-2,337

-31.0%

-2,798

-3,198

-12.5%

Cost of financial debt

-149

-113

+31.9%

-339

-215

+57.7%

Income from cash and cash equivalent

2

6

-66.7%

3

12

-75.0%

Net cost of financial debt

-147

-107

+37.4%

-336

-203

+65.9%

Other financial income and expenses

5

-68

nm

-85

-733

-88.4%

Income before tax

-1,754

-2,512

-30.2%

-3,219

-4,134

-22.1%

Income taxes

271

-81

nm

262

-254

nm

Net income of consolidated companies

-1,483

-2,593

-42.8%

-2,957

-4,388

-32.6%

Share of profits (losses) of associates

-9

-21

-57.1%

-16

-29

-44.8%

Net income for the period

-1,492

-2,614

-42.9%

-2,973

-4,417

-32.7%

Minority interest

-3

-2

+50.0%

-3

-4

-25.0%

Net income for the period – Group part

-1,489

-2,612

-43.0%

-2,970

-4,413

-32.7%

Consolidated Balance Sheet

Assets

30 Jun 2021

31 Dec 2020

€m

Goodwill

221

215

Intangible assets

1,243

1,230

Flight equipment

10,645

11,031

Other property, plant and equipment

1,453

1,548

Right-of-use assets

5,033

4,678

Investments in equity associates

166

230

Derivatives assets long term

105

92

Pension assets

0

211

Other financial assets

795

795

Deferred tax assets

269

282

Other non-current assets

1

4

Total non-current assets

19,931

20,316

Other short-term financial assets

540

607

Derivatives assets short term

408

160

Inventories

519

543

Trade receivables

1,530

1,248

Other current assets

1,047

914

Cash and cash equivalents

6,035

6,423

Total current assets

10,079

9,895

Total assets

30,010

30,211


Liabilities and equity

30 Jun 2021

31 Dec 2020

In million euros

Issued capital

643

429

Additional paid-in capital

4,949

4,139

Treasury shares

-25

-25

Perpetual

3,042

0

Reserves and retained earnings

-12,221

-9,970

Equity attributable to equity holders of Air France-KLM

-3,612

-5,427

Non-controlling interests

8

9

Total Equity

-3,604

-5,418

Pension provisions

2,119

2,147

Other provisions

3,977

3,670

Long-term debt

11,240

14,171

Lease financial debt

2,697

2,425

Derivatives liabilities long term

58

122

Deferred tax liabilities

4

22

Other non-current liabilities

2,501

1,294

Total non-current liabilities

22,596

23,851

Provisions

956

1,337

Current portion of long-term debt

842

1,318

Current portion of lease financial debt

809

839

Derivatives liabilities short term

67

363

Trade payables

1,604

1,435

Deferred revenue on ticket sales

2,889

2,394

Frequent flyer programs

904

916

Other current liabilities

2,945

3,175

Bank overdrafts

2

1

Total current liabilities

11,018

11,778

Total equity and liabilities

30,010

30,211

Statement of Consolidated Cash Flows from 1st January until 30 June 2021

€m

30 Jun 2021

30 Jun 2020

Net income from continuing operations

-2,973

-4,417

Amortization, depreciation and operating provisions

1,057

1,527

Financial provisions

58

88

Loss (gain) on disposals of tangible and intangible assets

14

-36

Loss (gain) on disposals of subsidiaries and associates

-26

0

Derivatives – non monetary result

-29

224

Unrealized foreign exchange gains and losses, net

86

74

Impairment

15

639

Other non-monetary items

759

282

Share of (profits) losses of associates

16

29

Deferred taxes

-264

244

Financial Capacity

-1,287

-1,346

(Increase) / decrease in inventories

12

59

(Increase) / decrease in trade receivables

-268

703

Increase / (decrease) in trade payables

138

-875

Increase / (decrease) in advanced ticket sales

489

378

Change in other receivables and payables

749

278

Change in working capital requirements

1,120

543

Net cash flow from operating activities

-167

-803

Purchase of property, plant and equipment and intangible assets

-1,099

-1,284

Proceeds on disposal of property, plant and equipment and intangible assets

565

172

Proceeds on disposal of subsidiaries, of shares in non-controlled entities

71

357

Acquisition of subsidiaries, of shares in non-controlled entities

2

-1

Dividends received

0

0

Decrease (increase) in net investments, more than 3 months

85

-3

Net cash flow used in investing activities

-376

-759

Capital increase

1,024

0

Perpetual (including premium)

0

0

Issuance of debt

690

5,014

Repayment on financial debt

-1,135

-1,993

Payments on lease debt

-433

-412

Decrease (increase ) in loans, net

7

52

Dividends and coupons on perpetual paid

0

0

Net cash flow from financing activities

153

2,661

Effect of exchange rate on cash and cash equivalents and bank overdrafts

1

-17

Change in cash and cash equivalents and bank overdrafts

-389

1,082

Cash and cash equivalents and bank overdrafts at beginning of period

6,422

3,711

Cash and cash equivalents and bank overdrafts at end of period

6,033

4,793

Change in treasury of discontinued operations

0

0

Return on capital employed (ROCE)

In million euros

30 Jun 2021

31 Mar 2021

31 Dec 2020

30 Sep 2020

30 Jun 2020

31
Mar 2020

31 Dec 2019

30
Sep 2019

Goodwill and intangible assets

1,464

1,479

1,445

1,470

1,500

1,564

1,522

1,481

Flight equipment

10,645

10,800

11,031

11,009

10,919

11,465

11,334

10,829

Other property, plant and equipment

1,453

1,476

1,548

1,535

1,551

1,579

1,580

1,554

Right of use assets

5,033

4,795

4,678

4,789

4,938

5,119

5,173

5,300

Investments in equity associates

166

223

230

224

267

299

307

310

Financial assets excluding marketable securities and financial deposits

147

146

146

135

133

142

140

131

Provisions, excluding pension, cargo litigation and restructuring

-4,033

-4,083

-3,922

-4,001

-4,131

-4,190

-4,058

-4,101

WCR, excluding market value of derivatives

-7,745

-6,410

-6,505

-6,894

-6,779

-6,650

-6,310

-6,285

Capital employed

7,130

8,426

8,651

8,267

8,398

9,328

9,688

9,219

Average capital employed (A)

8,199

9,158

Adjusted results from current operations

-4,112

-1,364

- Dividends received

0

-1

- Share of profits (losses) of associates

-45

-15

- Normative income tax

1,209

447

Adjusted result from current operations after tax (B)

-2,948

-933

ROCE, trailing 12 months (B/A)

-36.3%

-10.2%

Net debt

Balance sheet at

€m

30 Jun 2021

31 Dec 2020

Financial debt

11,985

15,388

Repo on triple A bonds

-48

-84

Lease debt

3,424

3,184

Currency hedge on financial debt

13

27

Accrued interest

-90

-107

Gross financial debt (A)

15,284

18,408

Cash and cash equivalents

6,035

6,423

Marketable securities

144

193

Cash securities

274

309

Bonds AAA

537

518

Bank overdrafts

-2

-1

Others

0

1

Repo on triple A bonds

-48

-84

Net cash (B)

6,940

7,359

Net debt (A) – (B)

8,344

11,049

Adjusted operating free cash flow

Second quarter

Half year

€m

2021

2020

2021

2020

Net cash flow from operating activities, continued operations

714

-1,085

-167

-803

Investment in property, plant, equipment and intangible assets

-632

-415

-1,099

-1,284

Proceeds on disposal of property, plant, equipment and intangible assets

345

161

565

172

Operating free cash flow

427

-1,339

-701

-1,915

Payments on lease debt

-217

-162

-433

-412

Adjusted operating free cash flow

210

-1,501

-1,134

-2,327

Operating cash burn





Second quarter

First Half

2021

2020

2021

2020

EBITDA

-248

-780

-874

-840

Provisions (CO2 and other)

-70

-39

-28

-33

Correction of spare parts inventory

2

-1

3

0

Addition to pension provisions

59

77

134

154

Reversal to pension provisions (cash-out)

-40

-47

-83

-95

Payment linked with shares

0

0

0

-2

Sales of tangible and intangible assets (excluding aeronautical)

70

43

31

41

Income from operation activities - cash impact

-226

-746

-817

-775

Restructuring costs

-80

-6

-125

-15

Other non-current income and expenses

-63

0

-63

-1

Cost of financial debt

-134

-105

-302

-200

Financial income

-3

0

-7

2

Realized foreign exchanges gain/loss

20

6

47

-1

Termination of trading hedges - cash

-2

-310

-8

-322

Current income tax

1

-3

-2

-10

Other financial charges & expenses - cash

-8

-3

-8

-26

Other elements

-2

1

-2

2

Financial capacity

-497

-1,166

-1,287

-1,346

Unit cost: net cost per ASK

Second quarter

Half year

2021

2020

2021

2020

Revenues (in €m)

2,750

1,182

4,910

6,201

Income/(loss) from current operations (in €m) -/-

752

1,553

1,931

2,368

Total operating expense (in €m)

3,502

2,735

6,841

8,569

Passenger network business – other revenues (in €m)

-77

-37

-131

-177

Cargo network business – other revenues (in €m)

-99

-75

-190

-142

Third-party revenues in the maintenance business (in €m)

-254

-222

-512

-716

Transavia - other revenues (in €m)

0

-1

0

-14

Third-party revenues of other businesses (in €m)

-6

-5

-13

-11

Net cost (in €m)

3,064

2,395

5,996

7,508

Capacity produced, reported in ASK*

39,657

9,042

74,254

76,337

Net cost per ASK (in € cents per ASK)

7.73

26.48

8.07

9.84

Gross change

-70.8%

-17.9%

Currency effect on net costs (in €m)

-15

-124

Change at constant currency

-70.6%

-16.6%

Fuel price effect (in €m)

16

-206

Net cost per ASK on a constant currency and fuel price basis (in € cents per ASK)

7.73

26.50

8.07

9.40

Change at constant currency and fuel price basis

-70.8%

-14.2%

* The capacity produced by the transportation activities is combined by adding the capacity of the Passenger network (in ASK) to that of Transavia (in ASK).

Group results
Air France Group

Second quarter

Half year

2021

Change

2021

Change

Revenue (in €m)

1,646

+194.5%

2,987

-16.4%

EBITDA (in €m)

-280

+286

-792

-158

Operating result (in m€)

-566

+492

-1,406

+188

Operating margin (%)

-34.4%

+155.1 pt

-47.1%

-2.5 pt

Operating cash flow before WCR and restructuring cash out (in €m)

-398

+389

-1,020

-109

Operating cash flow (before WCR and restructuring) margin

-24.2%

+116.7 pt

-34.1%

-8.6 pt


KLM Group



Second quarter

Half year

2021

Change

2021

Change

Revenue (in €m)

1,207

+72.3%

2,137

-24.8%

EBITDA (in €m)

33

+244

-78

+122

Operating result (in m€)

-185

+308

-522

+246

Operating margin (%)

-15.3%

+55.0 pt

-24.4%

+2.6 pt

Operating cash flow before WCR and restructuring cash out (in €m)

-56

+302

-169

+203

Operating cash flow (before WCR and restructuring) margin

-4.7%

+46.4 pt

-7.9%

+5.2 pt

NB: Sum of individual airline results does not add up to Air France-KLM total due to intercompany eliminations at Group level

Group fleet at 30 June 2021

Aircraft type

AF
(incl. HOP)

KL
(incl. KLC & MP)

Transavia

Owned

Finance lease

Operating lease

Total

In operation

Change / 31/12/20

B747-400

B777-300

43

16

20

15

24

59

59

2

B777-200

21

15

26

10

36

36

-4

B787-9

10

13

5

6

12

23

23

B787-10

6

3

3

6

5

A380-800

8

4

1

3

8

A350-900

10

2

5

3

10

10

4

A340-300

A330-300

5

5

5

5

A330-200

15

8

11

12

23

21

Total Long-Haul

107

63

0

71

30

69

170

159

2

B737-900

5

5

5

5

B737-800

31

85

31

8

77

116

116

10

B737-700

13

4

3

4

10

17

17

-3

A321

19

11

8

19

19

-1

A320

44

4

4

36

44

44

A319

31

13

18

31

30

-3

A318

18

8

10

18

18

Total Medium-Haul

112

49

89

75

16

159

250

249

3

ATR72-600

ATR72-500

ATR42-500

Canadair Jet 1000

14

14

14

13

-1

Canadair Jet 700

6

6

6

5

-4

Embraer 195 E2

4

4

4

4

4

Embraer 190

17

32

11

10

28

49

49

Embraer 175

17

3

14

17

17

Embraer 170

15

10

5

15

15

Embraer 145

11

11

11

Total Regional

63

53

0

55

24

37

116

103

-1

B747-400ERF

3

3

3

3

B747-400BCF

1

1

1

1

B777-F

2

2

2

2

Total Cargo

2

4

0

4

0

2

6

6

0

Total

284

169

89

205

70

267

542

517

4

SECOND QUARTER 2021 TRAFFIC

Passenger network activity*

Q2

Year to date

Total Passenger network*

2021

2020

Variation

2021

2020

Variation

Passengers carried (‘000s)

5,853

1,128

418.9%

10,321

16,894

(38.9%)

Revenue pax-kilometers (m RPK)

15,930

3,261

388.5%

29,363

53,111

(44.7%)

Available seat-kilometers (m ASK)

36,417

8,765

315.5%

70,005

71,168

(1.6%)

Load factor (%)

43.7%

37.2%

6.5

41.9%

74.6%

(32.6)

Long-haul

Passengers carried (‘000s)

1,769

339

421.2%

3,338

5,857

(43.0%)

Revenue pax-kilometers (m RPK)

12,199

2,592

370.6%

23,164

44,080

(47.5%)

Available seat-kilometers (m ASK)

30,625

7,615

302.2%

59,953

58,853

1.9%

Load factor (%)

39.8%

34.0%

5.8

38.6%

74.9%

(36.3)

North America

Passengers carried (‘000s)

423

106

298.7%

698

1,590

(56.1%)

Revenue pax-kilometers (m RPK)

3,113

759

310.1%

5,144

11,335

(54.6%)

Available seat-kilometers (m ASK)

9,009

2,495

261.1%

16,070

15,821

1.6%

Load factor (%)

34.6%

30.4%

4.1

32.0%

71.6%

(39.6)

Latin America

Passengers carried (‘000s)

171

42

307.8%

366

873

(58.1%)

Revenue pax-kilometers (m RPK)

1,649

411

301.0%

3,513

8,235

(57.3%)

Available seat-kilometers (m ASK)

5,165

1,043

395.2%

10,457

10,347

1.1%

Load factor (%)

31.9%

39.4%

(7.5)

33.6%

79.6%

(46.0)

Asia / Pacific

Passengers carried (‘000s)

178

74

140.0%

338

1,188

(71.5%)

Revenue pax-kilometers (m RPK)

1,546

656

135.5%

2,878

10,278

(72.0%)

Available seat-kilometers (m ASK)

5,885

2,556

130.2%

11,963

14,666

(18.4%)

Load factor (%)

26.3%

25.7%

0.6

24.1%

70.1%

(46.0)

Africa / Middle East

Passengers carried (‘000s)

686

47

1351.6%

1,217

1,235

(1.5%)

Revenue pax-kilometers (m RPK)

3,593

271

1227.9%

6,375

7,151

(10.9%)

Available seat-kilometers (m ASK)

6,505

480

1255.3%

12,472

9,143

36.4%

Load factor (%)

55.2%

56.4%

(1.1)

51.1%

78.2%

(27.0)

Caribbean / Indian Ocean

Passengers carried (‘000s)

310

70

345.1%

719

972

(26.0%)

Revenue pax-kilometers (m RPK)

2,298

495

364.5%

5,255

7,080

(25.8%)

Available seat-kilometers (m ASK)

4,062

1,041

290.4%

8,987

8,876

1.2%

Load factor (%)

56.6%

47.5%

9.0

58.5%

79.8%

(21.3)

Short and Medium-haul

Passengers carried (‘000s)

4,084

789

417.9%

6,983

11,037

(36.7%)

Revenue pax-kilometers (m RPK)

3,731

669

457.8%

6,199

9,031

(31.4%)

Available seat-kilometers (m ASK)

5,792

1,150

403.5%

10,052

12,316

(18.4%)

Load factor (%)

64.4%

58.2%

6.3

61.7%

73.3%

(11.5)

* Air France and KLM

Transavia activity

Q2

Year to date

Transavia

2021

2020

Variation

2021

2020

Variation

Passengers carried (‘000s)

1,175

90

1208.9%

1,527

2,439

(37.4%)

Revenue pax-kilometers (m RPK)

1,939

181

971.9%

2,522

4,636

(45.6%)

Available seat-kilometers (m ASK)

3,240

277

1069.2%

4,251

5,169

(17.8%)

Load factor (%)

59.9%

65.3%

(5.4)

59.3%

89.7%

(30.4)

Total group passenger activity**

Q2

Year to date

Total group**

2021

2020

Variation

2021

2020

Variation

Passengers carried (‘000s)

7,028

1,218

477.1%

11,847

19,333

(38.7%)

Revenue pax-kilometers (m RPK)

17,869

3,438

419.7%

31,884

57,748

(44.8%)

Available seat-kilometers (m ASK)

39,656

9,042

338.6%

74,256

76,377

(2.8%)

Load factor (%)

45.1%

38.0%

7.0

42.9%

75.6%

(32.7)

** Air France, KLM and Transavia

Cargo activity

Q2

Year to date

Total Group

2021

2020

Variation

2021

2020

Variation

Revenue tonne-km (m RTK)

2,093

1,178

77.7%

4,165

3,012

38.3%

Available tonne-km (m ATK)

2,624

1,458

79.9%

5,311

4,656

14.1%

Load factor (%)

79.8%

80.8%

(1.0)

78.4%

64.7%

13.7


Air France activity

Q2

Year to date

Total Passenger network activity

2021

2020

Variation

2021

2020

Variation

Passengers carried (‘000s)

3,606

663

444.0%

6,652

10,153

(34.5%)

Revenue pax-kilometers (m RPK)

9,154

1,661

451.1%

17,724

30,857

(42.6%)

Available seat-kilometers (m ASK)

17,637

3,637

384.9%

34,052

40,321

(15.5%)

Load factor (%)

51.9%

45.7%

6.2

52.0%

76.5%

(24.4)


Long-haul

Passengers carried (‘000s)

1,093

179

509.9%

2,142

3,465

(38.2%)

Revenue pax-kilometers (m RPK)

7,016

1,255

459.1%

14,011

25,428

(44.9%)

Available seat-kilometers (m ASK)

14,336

2,986

380.1%

28,252

32,907

(14.1%)

Load factor (%)

48.9%

42.0%

6.9

49.6%

77.2%

(27.7)


Short and Medium-haul

Passengers carried (‘000s)

2,513

484

419.6%

4,510

6,689

(32.6%)

Revenue pax-kilometers (m RPK)

2,138

406

426.9%

3,713

5,430

(31.6%)

Available seat-kilometers (m ASK)

3,300

651

406.9%

5,800

7,413

(21.8%)

Load factor (%)

64.8%

62.3%

2.5

64.0%

72.9%

(8.9)


Q2

Year to date

Cargo activity

2021

2020

Variation

2021

2020

Variation

Revenue tonne-km (m RTK)

912

379

140.3%

1,817

1,197

51.8%

Available tonne-km (m ATK)

1,268

508

149.8%

2,601

2,135

21.8%

Load factor (%)

71.9%

74.7%

(2.8)

69.8%

56.0%

13.8

KLM activity

Q2

Year to date

Total Passenger network activity

2021

2020

Variation

2021

2020

Variation

Passengers carried (‘000s)

2,247

465

383.0%

3,669

6,741

(45.6%)

Revenue pax-kilometers (m RPK)

6,776

1,600

323.4%

11,639

22,254

(47.7%)

Available seat-kilometers (m ASK)

18,780

5,127

266.3%

35,951

30,848

16.5%

Load factor (%)

36.1%

31.2%

4.9

32.4%

72.1%

(39.8)


Long-haul

Passengers carried (‘000s)

676

160

321.9%

1,196

2,392

(50.0%)

Revenue pax-kilometers (m RPK)

5,183

1,337

287.6%

9,153

18,652

(50.9%)

Available seat-kilometers (m ASK)

16,289

4,629

251.9%

31,700

25,945

22.2%

Load factor (%)

31.8%

28.9%

2.9

28.9%

71.9%

(43.0)


Short and Medium-haul

Passengers carried (‘000s)

1,572

305

415.1%

2,473

4,348

(43.1%)

Revenue pax-kilometers (m RPK)

1,593

263

505.4%

2,486

3,602

(31.0%)

Available seat-kilometers (m ASK)

2,491

499

399.8%

4,251

4,902

(13.3%)

Load factor (%)

63.9%

52.8%

11.2

58.5%

73.5%

(15.0)


Q2

Year to date

Cargo activity

2021

2020

Variation

2021

2020

Variation

Revenue tonne-km (m RTK)

1,181

798

48.0%

2,349

1,816

29.4%

Available tonne-km (m ATK)

1,355

950

42.6%

2,710

2,521

7.5%

Load factor (%)

87.2%

84.0%

3.2

86.7%

72.0%

14.7


1 The second quarter 2020 was highly impacted by worldwide lockdown
2 Passenger unit revenue is the aggregate of Passenger network and Transavia unit revenues, change at constant currency
3 See appendix for the calculation of the net debt

Attachment


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