Air France-KLM Second Quarter 2021 results

July 30, 2021

SECOND QUARTER 2021Operating result at -752 million euros, EBITDA at -248 million eurosAdjusted 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 flow” is 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 50Netherlands: Local +31 (0) 20 721 9251UK: Local +44 (0)330 336 9126US: Local +1 323-794-2597

Confirmation code: 4260430

Investor Relations                                                                PressOlivier Gall                 Michiel Klinkers                                        +33 1 49 89 52 59                        +33 1 49 89 52 60                        +33 1 41 56 56 00olgall@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 resultsAir 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 lockdown2 Passenger unit revenue is the aggregate of Passenger network and Transavia unit revenues, change at constant currency3 See appendix for the calculation of the net debt

Attachment

  • Q2_2021 Press release EN
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