Air France 2009 Annual Report Download - page 37

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Two contrasting halves
Air France-KLM Cargo began the year in a
difficult environment with a marked slowdown
as of the summer of 2008. The fall in traffic
was, however, offset by a strong rise in
revenues. In effect, in the cargo activity, the fuel
surcharges automatically keep pace with the
trend in the oil price which saw a sharp
increase over the summer. In the first half, traffic
fell by 2.7% but revenues grew by 9.5% to
€1.54 billion.
The second half saw a sudden downturn in the
cargo activity, with the significant fall-off in
international trade. Despite the capacity
adjustments implemented by most operators,
the gap between capacity and demand
widened still further. On a constant scope,
traffic fell by 16.7% and Air France-KLM’s
revenues by 13.5% to €1.31 billion.
Over the financial year and on a constant
scope, traffic declined by 9.8% and the load
factor fell by 4.6 points to 62.9%. Revenues
stood at €2.86 billion (-2.4%) and the operating
loss amounted to €207million versus income of
€39 million at March 31, 2008.
Environment
With a slowdown since the summer of 2008,
followed by a collapse as of September, air
freight was badly hit by the economic
recession. In seven months, between June
2008 and February 2009, the year-on-year
decline in international traffic for the IATA
(International Air Transport Association) scope
was to gather pace from -1.3% to -22.1%.
The Europe-Asia routes were the most seriously
affected whereas this axis had constituted the
main growth relay in recent years. While the
airlines have reduced their capacity, the current
crisis has resulted in an overcapacity situation
which is increasing the competitive pressure.
A look back
at the year
Muriel Joyeux: Faced with
a major economic recession
whose duration is impossible
to predict, how can the cargo
activity protect itself in the
short term while planning for
the future?
Faced with the severe economic recession,
we reacted immediately: as soon as the first
signs of a slowdown in activity appeared in
the summer of 2008, we reduced our
capacity, the aim being to optimize the scale
and use of the fleet in adjusting them to
demand. In February 2009, capacity was
15% lower than in 2008. Furthermore, we
decided to defer the delivery of new aircraft.
Of the five Boeing 777Fs initially planned,
only two were delivered in 2008-09. The four
longest-serving Boeings were retired in April
2009, the fleet being re-focused on
next-generation cargo aircraft: B777-200Fs
and B747-400ERFs.
These adjustments are totally consistent
with our long-term strategy, which is based
on next-generation aircraft with much
greater fuel efficiency. They will ensure the
Group’s increased competitiveness when
the fuel price starts rising again.
- 22% Year-on-year fall in
global air freight traffic (February
2009)
The cargo activity’s operating
environment was radically
transformed during the financal
year. Air freight, the leading
barometer of international trade
flows, was very badly hit as of
the start of the crisis.
Cargo
35
Air-France KLM - Annual report 2008-09