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Air France-KLM turns around and sets course for profit

July 29, 2014 Financial, Headline News No Comments Email Email

egtmedia59Air France-KLM is emerging strongly from its former financial downturn with a speed and power that has impressed analysts. It is already equipping its aircraft with facilities for an improved business class and has announced a 2015-2020 plan to wrest back market share from European low-cost rivals.

More than a third of KLM’s long-haul fleet has been fitted with the new world business class.

The airline group’s latest results show a sharp cut in losses and a healthy rise in operating profits.

Shares in the airline, the second-biggest in Europe after Lufthansa, surged after the news emerged, news agency AFP reported.

Air France KLM is an unusual and successful union of two airlines. The national carriers of France and the Netherlands joined forces in 2004 to become one of the world’s top carriers in terms of revenue and international revenue passenger kilometres. Yet the airlines operate as two separate brands and there are no plans to merge.

The group ran into financial problems at the end of 2011 and launched a recovery program called “Transform 2015” to turn the situation around. It’s working so well that the group will end the program next year and roll out its successor, a five-year strategy called “Perform 2020”. It will concentrate on competitiveness and growth.

“Despite a tough operating environment, the Air France-KLM Group maintained the momentum of its recovery in the first half of 2014, by halving its operating loss,” chairman Alexandre de Juniac said in a statement.

“Quarter after quarter our results are consistently reflecting the benefits of the productivity measures implemented under Transform 2015.”

Written by : Peter Needham

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