Airline group Air France-KLM has cut its operating losses to 66 million euros for the second quarter, compared with 145 million a year earlier.
The results were better than anticipated, sending the share price to 4.4 euros, a rise of 13 percent. But it was not all good news.
Jean-Cyril Spinetta, the CEO of Air France-KLM told euronews: “The debts of Air France-KLM, which were 2.5 billion euros at the end of 2008, jumped to 6.5 billion by the end of 2011. If we are not quickly able to halt this trajectory, it’ll saddle the group with serious future debt.”
The restructing plan has been at the heart of the turnaround, but is not popular with some Air-France unions.
Fabrice Cueille, a delegate from the SPAF union (Syndicat Pilotes Air France), said: “We believe the plan will be ineffective simply because it’s not backed up by a viable industrial project. Essentially, it does not respond credibly to the economic, commercial and strategic hole we find ourselves in.”
The group is being hit by low-cost European rivals in the short-haul sector on the one hand and Gulf carriers eating into it’s long-haul premium business on the other.
Giovanni Magi, euronews business correspondent, concluded: “The future of the airline depends on the application of this restructuring plan. Only a few years ago it was a world beater in terms of turnover – now it finds itself swamped by economic and financial turbulence.”