November 29, 2020

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A loss of 1.3 billion euros is expected for Air France-KLM

A loss of 1.3 billion euros is expected for Air France-KLM

For the third quarter, the analysts expect an average turnover of 2.8 billion euros. According to the analysts, this would lead to an operating loss of 1.2 billion euros and a net loss of 1.3 billion euros. The lowest estimate for the net loss is even 2.1 billion euros. The lowest sales estimate is 2.0 billion euros.

The data was collected from 16 analysts by Air France-KLM between October 8 and 20.

A year earlier, Air France-KLM had a turnover of 7.7 billion euros and an operating profit of 900 million euros. The bottom line was a net profit of 366 million euros.

In the second quarter of this year, the company suffered a loss of 2.6 billion euros. That corresponds to a turnover of less than 1.2 billion euros.

Investors are also likely to be concerned with net debt and liquidity. At the end of June, Air France-KLM had a net debt of just under 8 billion euros. The debt ratio was then 4.8. At the end of 2019 it was only 1.5. “The debt is still high,” said Deutsche Bank.

In addition, at the end of June, the airline group had liquidity or credit lines totaling 14.2 billion euros. This includes financial support from the Dutch and French states. Deutsche Bank had previously warned of the pilot’s high level of cash consumption.

outlook
When the figures for the second quarter were published, Air France-KLM announced that a “significant” EBITDA loss is expected for this year. Deutsche Bank expects sales of 10.8 billion euros this year compared to more than 27 billion euros in 2019. The EBITDA result is expected to be negative 2.3 billion euros.

The picture does not look good for society in the future either. Last month, Air France announced that it would only operate 50 percent of its originally scheduled flights in November and December.

“The fourth quarter will be extremely difficult and there are few signs that the first half of 2021 will be much better,” said IATA CEO Alexandre de Juniac on Tuesday. For the whole of 2021, IATA expects revenues for the aviation sector to be 46 percent lower than in 2019.

Eric Wilmer, an analyst at ABN AMRO, pointed out that the situation for the airline will only get worse if new corona resuscitation and stricter measures are introduced. “That makes us more cautious at Air France-KLM,” said Wilmer, who has sales advice. He is now anticipating a W-shaped recovery. Deutsche Bank doesn’t expect Air France-KLM to return to pre-crisis levels by 2024.