Air France-KLM Group narrowed its first-quarter loss as the passenger count rose and its fuel bill dropped and said it will keep negotiating with workers to improve productivity as it seeks to turn around the airline.
The operating loss decreased to 417 million euros ($464 million ) from 445 million euros a year earlier, while sales rose 1.8 percent to 5.7 billion euros, according to a statement from the Paris-based airline. Currency effects shaved 81 million euros from the operating result, Air France said.
The carrier has cut more than 7,500 jobs over three years as part of an overhaul aimed at making it more competitive with Deutsche Lufthansa AG, IAG’s British Airways and Gulf carriers such as Emirates. A previous plan was insufficient to return the group to profitability, and Chief Executive Officer Alexandre de Juniac is now pressing on with an additional plan that aims to increase productivity further through 2020.
“All the operational initiatives planned within the framework of the new strategic plan Perform 2020 are being deployed,” the airline said in a statement. “In parallel, negotiations with unions on labor productivity are ongoing.”
Air France-KLM dropped as much as 30 cents, or 3.7 percent, to 7.85 euros in Paris, and traded at 7.88 euros as of 9:10 a.m. The stock is little changed in value this year.
Air France said it wants to cut debt to about 4.4 billion euros by the end of the year, aided in part by a hybrid bond, and cut unit costs by 1 percent to 1.3 percent. The full-freighter business will return to operating break-even in 2017, helped by a reduction of the fleet to just 5 full freighters, Air France said.
Top management is scheduled to hold an extraordinary meeting with the principal employee council today to discuss plans to boost productivity.