CEO: Air France ‘not a bottomless pit’

THE HAGUE: CEO Frederic Gagey insisted Friday that Air France was “not a bottomless pit” and that the loss-making airline was making progress on stabilising its finances.
He also dismissed Dutch news reports suggesting that the Netherlands’ national carrier is bearing the brunt of cost-cutting measures at the struggling Air France-KLM group.
Gagey insisted in an opinion piece published in the financial daily Het Financieele Dagblad that “Air France is not a bottomless pit” and may have even turned a profit last year had it not been for a strike that grounded a plan to expand a low cost unit. Last year’s results “could have even been positive” had it not been for the strike by pilots that cost the company some 400 million euros, he said.
Air France-KLM is due to release its 2014 group results on February 19.
The Air France-KLM group lost 1.8 billion euros ($2.05 billion) in 2013 despite slashing 8,000 jobs over the last three years and hasn’t turned a profit since 2010.
“The year-end figures... will show how Air France-KLM has improved its financial figures by the end of 2014,” said Gagey.
Analysts have said that cheap fuel prices could soften Air France-KLM’s financial blows, but it may still be forced to slash more jobs as it faces stiff competition from Gulf and Asian airlines and the eurozone economy remains sluggish.
Gagey also took issue with Dutch newspaper reports — including a recent story published by the center-left daily Volkskrant, which said while KLM planned to save 700 million euros through cost-cutting, but no similar plans existed at Air France.




Last month, Air France confirmed plans to offer new voluntary departure incentives to 800 ground personnel and cabin crew.
“In the Netherlands KLM is being lauded (in papers) for its progress (in cutting costs). Air France is not getting the same acknowledgement,” Gagey said in an opinion piece, published in the financial daily Het Financieele Dagblad.
“The perception seems to be that KLM is making all the sacrifices, while Air France does nothing. I want to set the record straight.”




He said over the last three years Air France carried out some 100 projects improving the airline’s operational results by almost 400 million euros.
“The perception that KLM alone feels the pain while Air France does nothing hurts all 95,000 colleagues working hard to ensure the group’s future,” Gagey said.