AIR FRANCE-KLM yesterday reported a worse-than-expected operating loss of €597 million for the first quarter of 2012, as it emphasised the importance of cutting costs through new agreements with trade unions on wages and benefits.
The airline confirmed it was expecting its operating loss in the first half of this year to be higher than a year ago.
Air France-KLM is the most indebted of Europe’s large airlines and is grappling with high operating costs. Last month it entered sensitive talks with unions to reduce its expenses through new collective bargaining agreements on wages and benefits, and hopes to conclude the negotiations in June.
Air France-KLM described the first quarter as “tough”, with sharp increases in fuel and employee costs more than offsetting sales growth.
The airline reported revenue of €5.7 billion for the three months to March 31st, up 6 per cent compared with the same period last year. But its operating loss grew from €403 million one year ago to €597 million in the first quarter. – (Copyright The Financial Times Limited 2012)
