Activity impacted by crises in Japan, the Middle East and Africa. Stable unit revenues.
Revenues up by 8.7%. Reduction in unit cost (on a constant currency and fuel price basis). Reduction in long-haul capacity growth for Winter 2011 to 2.7%
Paris/ Amstelveen – The Board of Directors of Air France-KLM, presided by Jean-Cyril Spinetta, met on 27th July 2011 to examine the accounts for the quarter April-June 2011. The operating result stood at -145 million euros (-132 million euros at 30th June 2010) after a 16% rise in the fuel bill (+232 million euros) and a loss estimated at 100 million euros resulting from the political events in Africa and the Middle East, as well as the nuclear crisis in Japan.
Free translation into English for convenience only – French version prevails
FINANCIAL YEAR 2011
QUARTER APRIL-JUNE 2011
Activity impacted by crises in Japan, the Middle East and Africa
Stable unit revenues
Revenues up by 8.7%
Reduction in unit cost (on a constant currency and fuel price basis)
Reduction in long-haul capacity growth for Winter 2011 to 2.7%
The Board of Directors of Air France-KLM, presided by Jean-Cyril Spinetta, met on 27th July 2011 to examine
the accounts for the quarter April-June 2011.
The operating result stood at -145 million euros (-132 million euros at 30th June 2010) after a 16% rise in the
fuel bill (+232 million euros) and a loss estimated at 100 million euros resulting from the political events in
Africa and the Middle East, as well as the nuclear crisis in Japan. .
Key Data
Quarter to 30th June
In millions of euros, except earnings per share (in euros)
2011 2010 Change
Revenues 6,220 5,721 +8.7%
EBITDAR1 503 484 +3.9%
Operating result (145) (132) nm
Adjusted operating result2 (73) (64) nm
Net result, group share (197) 736 nm
Adjusted net result, group share3 (212) (252) nm
Earnings per share (0.67) 2.50 nm
Diluted earnings per share (0.67) 2.00 nm
Activity
Important markets still affected by the various geopolitical crises
Activity over the quarter, and particularly in June, was strongly affected by the difficult situation in some
important markets for the group.
The passenger business saw a 9.4% rise in traffic with capacity up by 10.1% (+5.2% adjusted for the
airspace closure in April 2010). The load factor declined by 0.5 points to 81.1%. Unit revenue per available
seat kilometre (RASK) was stable but increased by 0.8% excluding currency. Passenger revenues rose by
9.9% to 4.80 billion euros, after a negative currency effect of 0.9%. The operating result stood at -140 million
euros (-142 million euros a year earlier).
The cargo business was impacted by the crisis in Japan as well as a situation of overcapacity on China
departures. Traffic rose by 1.9% with capacity up by 6.2% (+2.9% adjusted for airspace closure in April
2010), leading to a 2.8 point decline in load factor to 66.7%. Unit revenue per available tonne kilometer
(RATK) declined by 2.7% but increased by 0.6% excluding currency. Revenues amounted to 799 million
euros (+3.2%) while the operating result was -14 million euros, (versus +11 million euros at 30th June 2010).
1
Before amortisation, provisions and operating leases
2
Adjusted for the portion of operating leases corresponding to financial charges (34%)
3
See definition in the Reference Document 2010-11, page 133. Reconciliation table available in the results presentation
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Revenues of the Maintenance business rose by 7.4% to 262 million euros. The operating result stood at 23
million euros, up 15% versus 30th June 2010. The engines and components activities continued to perform
well over the quarter.
Total revenues amounted to 6.22 billion euros, up by 8.7% after a negative currency effect of 1.2%.
Well controlled unit costs
Operating costs rose 8.7% and by 6.2% excluding fuel. Over the quarter, the group realised 129 million
euros in savings in the context of the ‘Challenge 12’ programme, the annual objective of which has been
revised up from 470 million euros to 500 million euros. In equivalent available seat kilometres (EASK), unit
costs were stable, and declined by 3.0% at constant fuel prices and exchange rates, for production in EASK
up by 8.8%.
The fuel bill rose by 232 million euros to 1.67 billion euros (+16%) under the combined effect of a 7% rise in
volume, a favourable currency effect of 8% and a rise in fuel prices after hedging of 19%. Employee costs
stood at 1.93 billion euros, up by 3.5%, of which a third linked to the payment of an exceptional bonus.
The operating result amounted to -145 million euros (-132 million euros at 30th June 2010). The adjusted
operating result stood at -73 millions euros. Net interest costs declined from 96 million euros at 30th June
2010 to 87 million euros at 30th June 2011. The currency result included in the item ‘Other financial income
and costs’ remained negative at -33 million euros (-100 million euros a year earlier).
Net result, group share stood at -197 million euros (versus 736 million euros a year earlier, which included
the capital gain of 1.03 billion euros realised on Amadeus). The net result adjusted for non-recurring items
was -212 million euros versus -252 million euros a year earlier. Earnings per share and diluted earnings per
share stood at -0.67 euros (2.5 euros and 2.0 euros respectively at 30th June 2010).
Operating cash flow of 345 million euros
Investments net of disposals amounted to 436 million euros at 30th June 2011 (475 million euros in the
equivalent quarter 2010-11). Operating cash flow was 345 million euros. At 30th June 2011, Air France-KLM
had cash of 3.9 billion euros and renewed credit lines of 1.85 billion euros of which 1.6 billion euros renewed
for 5 years in 2011 at Air France and at KLM.
Shareholders’ funds declined by 312 million euros versus 31st March 2011 to 6.91 billion mainly reflecting the
negative net result. Net debt stood at 6.04 billion euros (5.89 billion euros at 31st March 2011). The gearing
ratio was 0.92 (0.85 at 31st March 2011).
Outlook
The operating environment remains uncertain due to the situation in Japan, Africa and the Middle-East and
the Eurozone crisis. Moreover, fuel prices are still at high levels and the euro remains volatile. For the
upcoming Winter season, the group has decided to reduce long-haul capacity growth (including the Martinair
passenger activity) from 5.1% to 2.7% (-2.4 points). In this context, the group continues to target a positive
operating result for the calendar year 2011.
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Information by business
Passenger
Quarter to 30th June
2011 2010 Change
Traffic (RPK millions) 53,931 49,282 +9.4%
Capacity (ASK millions) 66,531 60,435 +10.1%
Load factor 81.1% 81.5% -0.5 pts
Total passenger revenues (€m) 4,802 4,368 +9.9%
Revenues from scheduled passenger business (€m) 4,586 4,164 +10.1%
Unit revenue per RPK (€cts) 8.50 8.45 +0.6%
Unit revenue per RPK ex currency (€cts) – – +1.5%
Unit revenue per ASK (€cts) 6.89 6.90 -0.1%
Unit revenue per ASK ex currency (€cts) – – +0.8%
Unit cost per ASK (€cts) 7.02 7.04 -0.3%
Unit cost per ASK at constant currency and fuel price
(€cts) – – -2.8%
Operating income (€m) (140) (142) nm
Cargo
Quarter to 30th June
2011 2010 Ch
ange
Traffic (RTK millions) 2,865 2,812 +1.9%
Capacity (ATK millions) 4,293 4,041 +6.2%
Load factor 66.7% 69.6% -2.8 pts
Total cargo business revenues (€m) 799 774 +3.2%
Revenues from scheduled cargo business (€m) 759 734 +3.4%
Unit revenue per RTK (€cts) 26.47 26.09 +1.5%
Unit revenue per RTK ex currency (€cts) – – +4.8%
Unit revenue per ATK (€cts) 17.67 18.15 -2.7%
Unit revenue per ATK ex currency (€cts) – – +0.6%
Unit cost per ATK (€cts) 17.73 17.62 +0.6%
Unit cost per ATK on constant currency and fuel price
(€cts) – – -3.5%
Operating income (€m) (14) 11 nm
Maintenance
Total maintenance revenues rose amounted to 785 million euros (+6%) of which 262 million euros with third
parties (+7.4%). The operating result was up 15% to 23 million euros. High value added activities, notably
engines and components, continued to perform well.
Other businesses
Other businesses comprise mainly the leisure activities of Transavia and the catering business of Servair.
They realised revenues of 357 million euros against 335 million euros a year earlier. The operating result
stood at -14 million euros (-21 million euros at 30th June 2010). The leisure business was affected by the
uprisings in Tunisia and Egypt, but still generated a 5.8% increase in revenues to 255 million euros and an
operating result of -11 million euros versus -20 million euros the previous year.
Catering generated third party revenues of 84 million euros (76million euros at 30th June 2010). The
operating income stood at 2.4 million euros (-1.8 million euros the previous year).
4/9
Additional information
The Quarter April-June 2011 accounts are not audited by the Statutory Auditors.
Practical information
Conference call on 28th July 2011 at 15.30h CET
To connect, dial:
. from France : 01 70 99 32 08
. from the rest of the world : +44 (0)20 7162 0025
Password: AKH
The results presentation will be available on www.airfranceklm-finance.com.
5/9
INCOME STATEMENTS (unaudited)
April to June
In euros millions 2011 2010 Variation
SALES 6,220 5,721 8.7%
Other revenues 21 – nm
EXTERNAL EXPENSES -3,959 -3,609 9.7%
Aircraft fuel -1,673 -1,441 16.1%
Chartering costs -144 -118 22.0%
Aircraft operating lease costs -211 -201 5.0%
Landing fees and en route charges -463 -426 8.7%
Catering -144 -135 6.7%
Handling charges and other operating costs -333 -322 3.4%
Aircraft maintenance costs -290 -285 1.8%
Commercial and distribution costs -234 -239 -2.1%
Other external expenses -467 -442 5.7%
Salaries and related costs -1,932 -1,867 3.5%
Taxes other than income taxes -50 -45 11.1%
Amortization and depreciation -406 -399 1.8%
Provisions -31 -16 nm
Other income and expenses -8 83 nm
INCOME FROM CURRENT OPERATIONS -145 -132 -9.8%
Sales of aircraft equipment – 11 nm
Sales of subsidiaries – – –
Other non-current income and expenses 2 999 nm
INCOME FROM OPERATING ACTIVITIES -143 878 nm
Income from cash and cash equivalents 26 23 13.0%
Cost of financial debt -113 -119 -5.0%
Net cost of financial debt -87 -96 -9.4%
Foreign exchange gains (losses), net -33 -100 nm
Change in fair value of financial assets and liabilities 5 -18 nm
Other financial income and expenses -1 5 nm
INCOME BEFORE TAX -259 669 nm
Income taxes 81 93 12.9%
NET INCOME OF CONSOLIDATED COMPANIES -178 762 nm
Share of profits (losses) of associates -18 -31 41.9%
INCOME FROM CONTINUING OPERATIONS -196 731 nm
Net income from discontinued operations – – –
NET INCOME FOR THE PERIOD -196 731 nm
Minority interest -1 5 nm
NET INCOME FOR THE PERIOD – GROUP -197 736 nm
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CONSOLIDATED BALANCE SHEET (unaudited)
April to June in € millions
Assets 2011 2010
Goodwill 420 422
Intangible assets 716 695
Flight equipment 11,069 11,040
Other property, plant and equipment 2,077 2,111
Investments in equity associates 411 422
Pension assets 3,069 2,995
Other financial assets (including €557 million of deposits related to financial leases
and €70 million of investments over one year as of June 30, 2011, compared to €503
million of deposits related to financial leases as of March 31, 2011) 1,845 1,654
Deferred tax assets 1,048 933
Other non-current assets 149 156
Total non current assets 20,804 20,428
Assets held for sale 21 21
Other short term financial assets (including €130 million of deposits related to
financial leases and €534 million of investments between 3 months and 1 year as of
June 30, 2011,compared respectively to €149 million and €574 million as of March
31, 2011)
730 751
Inventories 593 558
Trade accounts receivable 2,172 1,938
Income tax receivables 4 6
Other current assets 1,248 1,550
Cash and cash equivalents 3,151 3,717
Total current assets 7,919 8,541
Total assets 28,723 28,969
April to June in € millions
Liabilities and equity 2011 2010
Issued capital 300 300
Additional paid-in capital 2,971 2,971
Treasury shares (90) (94)
Reserves and retained earnings 3,362 3,675
Equity attributable to equity holders of Air France-KLM 6,543 6,852
Non-controlling interests 51 54
Total Equity 6,594 6,906
Provisions and retirement benefits 1,955 1,930
Long-term debt 8,779 8,980
Deferred tax 463 511
Other non-current liabilities 265 272
Total non-current liabilities 11,462 11,693
Provisions 258 287
Current portion of long-term debt 1,703 1,808
Trade accounts payable 2,357 2,211
Deferred revenue on ticket sales 2,846 2,440
Frequent flyer programs 789 806
Current tax liabilities 4 3
Other current liabilities 2,610 2,686
Bank overdrafts 100 129
Total current liabilities 10,667 10,370
Total liabilities 22,129 22,063
Total liabilities and equity 28,723 28,969
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CONSOLIDATED STATEMENT OF CASH F
LOWS (unaudited)
In € millions
Period from April 1 to June 30, 2011 2010
Net income for the period – Equity holders for Air France-KLM (197) 736
Non-controlling interests 1 (5)
Amortization, depreciation and operating provisions 437 415
Financial provisions 2 (4)
Gain on disposals of tangible and intangible assets (3) (11)
Gain on Amadeus operation – (1,030)
Derivatives – non monetary result (22) (5)
Unrealized foreign exchange gains and losses, net 27 113
Share of (profits) losses of associates 18 31
Deferred taxes (90) (100)
Other non-monetary items (106) (52)
Subtotal 67 88
(Increase) / decrease in inventories (40) (16)
(Increase) / decrease in trade receivables (228) (226)
Increase / (decrease) in trade payables 130 190
Change in other receivables and payables 416 534
Net cash flow from operating activities 345 570
Acquisitions of subsidiaries and investments in associates, net of cash acquired – –
Purchase of property, plant and equipment and intangible assets (913) (636)
Proceeds on Amadeus transaction – 193
Proceeds on disposal of property, plant and equipment and intangible assets 477 161
Dividends received – –
Decrease (increase) in investments, net between 3 months and 1 year (69) (30)
Net cash used in investing activities (505) (312)
Purchase of non-controlling interests, of shares in non-controlled entities (7) (3)
Disposal of subsidiaries without control loss, of shares in non-controlled entities 3 –
Issuance of long-term debt 408 245
Repayments on long-term debt (666) (93)
Payment of debt resulting from finance lease liabilities (139) (77)
New loans (26) (17)
Repayments on loans 59 28
Dividends paid (1) –
Net cash flow from financing activities (369) 83
Effect of exchange rate on cash and cash equivalents and bank overdrafts (8) 13
Change in cash and cash equivalents and bank overdrafts (537) 354
Cash and cash equivalents and bank overdrafts at beginning of period 3,588 3,635
Cash and cash equivalents and bank overdrafts at end of period 3,051 3,989
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AIR FRANCE-KLM FLEET
Air France fleet
Aircraft AF Brit Air City Jet Régional VLM Transavia Owned Finance
lease Operating
lease Total In operation Change /
3/31/11
B747-400 10 3 7 10 10
B777-300 34 14 5 15 34 34 3
B777-200 25 15 2 8 25 25
B767-300
A380-800 6 2 1 3 6 6 2
A340-300 16 10 2 4 16 15 -1
A330-200 15 3 2 10 15 15
MD11
Long haul 106 47 12 47 106 105 4
B747-400 cargo 5 2 3 5 3
B777- cargo 2 2 2 2
MD-11-CF
MD-11-F
Freighter 7 2 2 3 7 5
B737 900
B737-800 10 10 10 10 1
B737-700
B737-400
B737-300
A321 24 11 1 12 24 24
A320 59 24 3 32 59 56 1
A319 44 21 4 19 44 44
A318 18 13 5 18 18
Medium haul 145 10 69 13 73 155 152 2
AVRO RJ 85 27 15 12 27 22
Canadair Jet 1000 7 7 7 7 1
Canadair Jet 900 1 1 1 1
Canadair Jet 700 15 6 9 15 15
Canadair Jet 100 15 11 2 2 15 15
Embraer 190 10 4 6 10 10
Embraer 170 10 8 2 10 10
Embraer 145 26 9 13 4 26 26 -1
Embraer 135 7 4 3 7 4 -2
Fokker 100 5 3 2 5 5 -1
Fokker 70
Fokker 50 14 12 2 14 14 -1
Regional 43 27 53 14 79 29 29 137 129 -4
TOTAL 258 43 27 53 14 10 197 56 152 405 391 2
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KLM fleet
Aircraft KLM KLM Cityhopper Transavia Martinair Owned Finance
lease Operating
lease Total In operation Change /
3/31/11
B747-400 22 13 4 5 22 22
B777-300 5 5 5 5
B777-200 15 6 9 15 15
B767-300 3 3 3 3 -1
A380-800
A340-300
A330-200 11 6 5 11 11
MD11 10 8 2 10 10
Long haul 63 3 21 23 22 66 66 -1
B747-400 cargo 4 4 3 5 8
5
B777- cargo
MD-11-CF 4 3 1 4 4
MD-11-F 3 2 1 3 3
Freighter 4 11 3 5 7 15 12
B737 900 5 2 3 5 5
B737-800 23 19 9 11 22 42 42 1
B737-700 13 10 2 11 10 23 23 3
B737-400 8 6 2 8 6 -2
B737-300 3 3 3 2 -1
A321
A320
A319
A318
Medium haul 52 29 20 24 37 81 78 1
AVRO RJ 85
Canadair Jet 1000
Canadair Jet 900
Canadair Jet 700
Canadair Jet 100
Embraer 190 17 13 4 17 17
Embraer 170
Embraer 145
Embraer 135
Fokker 100 5 5 5 5
Fokker 70 26 23 3 26 26
Fokker 50 2 2 2
Regional 50 30 16 4 50 48
KLM 119 50 29 14 74 68 70 212 204
TOTAL Air France-KLM Group 271 124 222 617 595 2
