Second QUARTER 2022

July 29, 2022

Second QUARTER 2022Strong results driven by a spike in demand

Second quarter:

  • Positive operating result at 386 million euros
  • Net income at 324 million euros, showing a 1.8 billion euros improvement compared to the same quarter last year
  • Positive adjusted operating free cash flow at 1.5 billion euros thanks to positive EBITDA and strong ticket sales. It improved by 1.3 billion euros compared to the same quarter in 2021
  • The Group has already successfully achieved 2.8 billion euros of equity measures of the up to 4 billion announced last February
  • Air France-KLM/Air France redeemed 1.6 billion euros of the French State perpetual bonds (including coupon). KLM fully repaid the State backed RCF and direct Dutch State loan amounting for 942 million euros
  • Net debt at 6.0 billion euros, down by 2.2 billion euros compared to end of 2021 thanks to a positive adjusted operating free cash flow and the rights issue completed in June 2022

Mr. Benjamin Smith, Group CEO, said:“The strong recovery we see this summer is putting the entire aviation industry to the test. While Air France-KLM had prepared for close to pre-pandemic demand levels, our airlines are not immune to the major operational challenges taking place around the world. Customer satisfaction is at the top of our priorities and we know we have not fully been able to deliver the quality of service that has come to be expected from us. I would like to thank our customers for their trust and patience. I would also like to express my gratitude towards our employees for their unwavering commitment, even in difficult situations. It is thanks to their dedication and sense of collective responsibility that we are able to post better-than-expected revenues and results this quarter. Going forward we will continue to implement our strategy in order to further transform our organization. We aim to increase our resilience to the changes of our environment while continuing to accelerate our efforts to make our Group and aviation as a whole more sustainable.”

Outlook:

Context:Air France and KLM are among the most active airlines to accommodate the travel recovery, with a second quarter capacity for Network passenger activity at an index of 82%. Despite the summer growth anticipation efforts since January, operational difficulties arose in Europe and the United States, mainly due to labour shortages at airports. Air France and KLM are doing their utmost to mitigate these challenges and has prioritised safeguarding the trust of our customers. For this quarter, it resulted into 70 million euros additional compensation costs.

CapacityIn this recovery context, the Group expects the capacity in Available Seat Kilometers for Air France-KLM Network passenger activity at an index of:

  • 80% to 85% in the Third quarter of 2022
  • 85% to 90% in the Fourth quarter of 2022
  • Circa 80% for the Full Year 2022

All indices compared to the respective period of 2019.

The capacity for Transavia in Available Seat Kilometers is expected at an index above 100 for the full year and in the third and fourth quarter 2022 compared to 2019.

YieldThe yield environment should remain high for the rest of 2022 with a strong summer demand resulting in yield levels above 2019.

Expected operating result

  • Significantly positive in the third quarter
  • Positive in 2022, for the first time since 2019

CashAs of June 30 2022, the Group has a strong 11.9 billion euros of liquidity and credit lines at disposal.

Full year 2022 Net Capex spending is estimated at circa 2.5 billion euros, which is 80% fleet & fleet related and 20% IT & Ground related.

Air France-KLM made major steps to pave the financial trajectory

  • In February, Air France-KLM announced plans for a set of equity strengthening measures up to 4 billion euros.
  • Later in June, the Group successfully completed a 2.3 billion euros rights issue, with CMA-CGM becoming a new strategic shareholder and a reference commercial partner in the cargo activity. Air France-KLM / Air France redeemed 1.6 billion euros of the French State perpetual bonds (including coupon), aiming to redeem at least 75% as soon as possible.
  • In the meantime, KLM fully repaid the State backed RCF and direct Dutch State loan amounting for 942 million euros. 2.4 billion euros RCF and State Loan is still available, and KLM expects to strengthen its balance sheet with positive net results and further equity measures are being contemplated.
  • Air France-KLM and Apollo have closed on the 28th July an investment of 500 million euros by Apollo Funds to finance an ad hoc affiliate of Air France owning a pool of spare engines, as per the agreement signed on July 13th. In alignment with the requirement of article 77 bis of the European Commission’s “Temporary Framework for State aid recapitalization measures”, proceeds from the investment will be used to further redeem outstanding French State perpetual bonds issued in late April 2021.
  • Later in 2022-2023, the Group will contemplate possible hybrid bond issuances up to 1.2 billion euros subject to market conditions.

The restoration of negative equity will be done through net profit generation and quasi/equity projects.

Air France-KLM Group: Second quarter operating margin at 2019 level despite the steep increase of fuel cost

  Second quarter Half year
  2022 Change Change constant currency 2022 Change Change constant currency
Passengers (thousands) 22,803 +224.5%   37,326 +215.0%  
Capacity (ASK m) 72,127 +81.9%   130,192 +75.3%  
Traffic (RPK m) 61,365 +243.4%   104,499 +227.7%  
Passenger unit revenue per ASK (€ cts)      7.41 +93.6% +89.1% 6.51 +91.8% +87.9%
Group unit revenue per ASK (€ cts)      8.52 +46.1% +42.1% 7.73 +41.4% +38.0%
Group unit cost per ASK (€ cts) at constant fuel      7.98 +3.2% -12.7% 7.71 -4.6% -15.6%
Revenues (€m) 6,707 +143.9% +138.7% 11,152 +127.1% +123.8%
EBITDA (€m) 931 1,180 1,186 1,152 2,029 2,050
Operating result (€m) 386 1,139 1,145 36 1,970 1,989
Operating margin (%) 5.8% +33.1 pt +32.8 pt 0.3% +39.7 pt +39.5 pt
Net income - Group part (€m) 324 +1,813   -228 +2,744  
Adj. operating free cash flow (€m) 1,532 +1,322   2,163 +3,297  
Net debt at end of period (€m)1       6,036 -2,180  

In the Second quarter 2022, the Air France-KLM Group posted a positive operating result of 386 million euros, up by 1,145 million euros at a constant currency compared to last year, and was driven by an increase of capacity. In parallel, the increase of load factor and yield generated an increase of the unit revenue. Net income amounted to 324 million euros in the Second quarter 2022, an increase of 1.8 billion euros compared to last year. The recognition of tax assets at KLM group for an amount of around 300 million euros supported the positive net income generation.

In a challenging cost environment, transformation programs contain the unit cost up 2.4% with 15% capacity below 2019.

The unit cost is up 2.4% at a constant fuel price and constant currency versus the Second quarter 2019, with a capacity down by 15%. The ongoing transformation programs enable Air France-KLM to limit the impact of increasing costs such as airport and ATC charges, and the KLM Collective Labour Agreement (CLA) delayed implementation.

Compared to June 2019, the number of Full Time Equivalents (FTE’s) of Air France excluding Transavia reduced by 16% and by 13% for KLM.

Staff costs decreased in the Second quarter by 11% compared to the same quarter in 2019 thanks to FTE reduction and the French government support on wages. Corrected for government support on wages, staff costs decreased by 9%.

Business review  

Network: Significant improvement in operating result

Network  Second quarter Half year
2022 Change Change constant currency 2022 Change Change constant currency
Total revenues (€m) 5,753 +143.5% +137.4% 9,647 +128.6% +123.6%
Scheduled revenues (€m) 5,532 +153.0% +145.7% 9,207 +136.1% +130.2%
Operating result (€m) 352 +1,006 +1,013 43 +1,758 +1,773

Second quarter 2022 revenues increased by 137.4% at constant currency to 5,753 million euros. The operating result amounted to 352 million euros, a 1,013 million euros increase at constant currency compared to last year.

Passenger network: Double-digit yield increase on most regions and on botheconomy and premium cabins

  Second quarter Half year
Passenger network 2022 Change Change constant currency 2022 Change Change constant currency
Passengers (thousands) 17,556 +199.9%   29,497 +185.8%  
Capacity (ASK m) 61,697 +69.4%   114,268 +63.2%  
Traffic (RPK m) 52,479 +229.4%   91,346 +211.1%  
Load factor 85.1% +41.3 pt   79.9% +38.0 pt  
Total passenger revenues (€m) 4,835 +229.3% +223.4% 7,818 +214.3% +209.6%
Scheduled passenger revenues (€m) 4,732 +239.9% +231.3% 7,610 +223.0% +216.0%
Unit revenue per ASK (€ cts) 7.67 +100.7% +95.6% 6.66 +97.9% +93.6%

Second quarter 2022, capacity in Available Seat Kilometers (ASK) was 69.4% higher than last year and at 82% of 2019 Second quarter level which was in the middle of the Group’s guidance provided during the First quarter 2022 results presentation.

In response to the rise in fuel prices and other external costs, the Group proceeded to different fare increases during the first half of the year across all long-haul flights. The amount of the increase varies according to destination and class of travel, and applies to flights operated by Air France and KLM. Additionally, the spike in travel demand, the strong performance in Premium cabins, and the solid corporate traffic recovery have all led to a yield above the 2019 level in the second quarter.

The Second quarter result is driven by a strong performance of the entire network:

  • North Atlantic: Strong improvement since mid-January driven by the strong traffic recovery, with strong yield due to fare increases and a positive cabin mix. The second quarter showed new bookings outpacing 2019 levels.
  • Capacity discipline on South America routes combined with a very resilient demand led to a strong yield. Corporate traffic ramped up quickly in the same time.
  • Asia: The strong yield performance is due to limited capacity and the group continues to observe important differences between the regions. South East Asia and India showed positive dynamic in yield and traffic.
  • Caribbean & Indian Ocean: The yields improved thanks to successive fare increases and a positive cabin mix effect.
  • Africa: A strong corporate recovery was observed in all areas. For KLM, the performance was driven by East and South Africa with strong yield increase linked to positive cabin mix and a positive economy yield evolution. For Air France, performance was driven by West and Central African countries with a good steering strategy.
  • Middle-East: The second quarter performance stayed strong thanks to Dubai, especially on premium cabins and an increased traffic on some routes.
  • Medium-haul: Strong booking dynamic since March. KLM is impacted by operational challenges and restrictions on flight departures from Amsterdam which led to traffic restriction. The yield is above 2019, especially on leisure routes with network capacity constraints and a positive competition environment.
  • Short-haul: The network was able to absorb capacity recovery month over month thanks to business motive dynamism. Yield is above 2019 helped by steering yield initiatives.

During the Second quarter, Air France added three Airbus 350-900 and two Airbus A220-300. One B777-200, one Airbus 320, three Airbus 319, two Embraer 170 and five Canadair Jet 1000 were phased out. KLM phased in three Embraer 195 E2. The Group will continue to introduce new generation aircraft to its fleet in order to improve its economic and environmental performance.

Cargo: Strong yield increase mitigates traffic impact on Asia trade lanes

  Second quarter Half year
Cargo business 2022 Change Change constant currency 2022 Change Change constant currency
Tons (thousands) 236 -13.4%   472 -12.7%  
Capacity (ATK m) 3,341 +27.4%   6,315 +18.9%  
Traffic (RTK m) 1,732 -17.2%   3,497 -16.1%  
Load factor 51.8% -27.9 pt   55.4% -23.1 pt  
Total Cargo revenues (€m) 918 +2.6% -1.1% 1,828 +5.5% +2.2%
Scheduled cargo revenues (€m) 801 +0.7% -2.8% 1,597 +3.5% +0.4%
Unit revenue per ATK (€ cts ) 23.96 -20.9% -23.7% 25.29 -13.0% -15.5%

Compared to the Second quarter 2021, cargo capacity strongly increased by 27.4% in Available Ton Kilometers, mainly due to the increase in worldwide belly capacity, except for Asia. This limited belly capacity to Asia affected the overall traffic which resulted in a traffic decrease of 17.2% and contributed to an overall decrease in load factor by 27.9 points. Yields, however, remain at a consistently high level (+17.4% vs. 2021), leading to a total Second quarter revenue performance at last year's level.

When compared to the pre-COVID year 2019, cargo capacity in the Second quarter was still 8% below 2019. However, due to exceptional yield performance – driven by high demand – total revenues in the Second quarter of 2022 were 76% higher than 2019.

In May, Air France-KLM announced its entry into a strategic partnership with CMA-CGM Air Cargo (CCAC). The partnership agreement is currently being worked out and expected to be finalized before the end of 2022.In June, Air France-KLM Cargo won the Air Cargo Industry Achievement Award for their pioneering work in the development and distribution of sustainable aviation fuel and the fast expansion of its leading SAF program.

Transavia: Capacity above pre-crisis level with a load factor of 85%

  Second quarter Half year
Transavia 2022 Change 2022 Change
Passengers (thousands) 5,247 +346.8% 7,828 +412.8%
Capacity (ASK m) 10,430 +221.9% 15,924 +274.6%
Traffic (RPK m) 8,886 +358.2% 13,154 +421.6%
Load factor 85.2% +25.3 pt 82.6% +23.3 pt
Total passenger revenues (€m) 601 +378.0% 850 +422.2%
Unit revenue per ASK (€ cts) 5.86 +51.0% 5.41 +41.2%
Unit cost per ASK (€ cts) 6.04 -12.5% 6.11 -31.9%
Operating result (€m) -18 +80 -110 +108

In the Second quarter of 2022, the demand recovery in leisure traffic in Europe and North Africa continued. Compared to last year, the capacity in the Second quarter increased by 221.9%, traffic increased by 358.2%, and the number of passengers increased by 346.8%. Last year, Second quarter was heavily impacted by travel restrictions in Europe and North Africa.

The Operating result was slightly negative at -18 million euros, although improved by 80 million euros compared to the Second quarter of 2021.

Capacity in the Second quarter was above the level of the Second quarter of 2019 and unit revenue even above the Second quarter 2019 mainly driven by a strong yield improvement.

The fleet of Transavia is approaching 100 aircraft, to further capture the strong demand of leisure traffic in Europe.

Maintenance business: Operating margin above 2019 level

  Second quarter Half year
Maintenance 2022 Change Change constant currency 2022 Change Change constant currency
Total revenues (€m) 911 +34.1%   1,742 +33.9%  
Third-party revenues (€m) 345 +35.1% +35.3% 642 +25.0% +30.0%
Operating result (€m) 57 60 61 101 111 117
Operating margin (%) 6.3% +6.7 pt +6.8 pt 5.8% +6.6 pt +7.1 pt

The Second quarter operating result stood at 57 million euros, an increase of 61 million euros at constant currency versus the Second quarter 2021 thanks to a higher activity and an operational improvement.   

Total revenues increased by 34.1% in the Second quarter while third party revenues increased by 35.1%, showing a strong recovery. The increase in internal revenues is consistent with the activity increase of the Air France-KLM airlines compared to the Second quarter 2021.The operating margin stood at 6.3%, which is 6.7 points higher than the operating results in the Second quarter 2021. The half year margin amounts to 5.8%, which is at the level of the pre-covid period when excluding the states support.

During the second quarter, Air France-KLM and Apollo Global Management announced the signing of a definitive agreement for Apollo managed funds and entities to make a 500 million euros investment in to an ad hoc operating affiliate of Air France that will own a pool of spare engines dedicated to the airline’s Engineering and Maintenance activities.

Second quarter: Positive EBITDA and strong ticket sales reinforces the adjusted operating free cash flow and supports net debt reduction by 2.2 billion euros

  Second quarter Half year
In € million 2022 Change 2022 Change
Cash flow before change in WCR and Voluntary Departure Plans, continuing operations (€m) 785 +1,237 841 +2,083
Cash out related to Voluntary Departure Plans (€m) -68 +12 -125 +0
Change in Working Capital Requirement (WCR) (€m) 1,510 +299 2,835 +1,715
Net cash flow from operating activities (€m) 2,239 1,525 3,620 3,787
Net investments* (€m) -482 -195 -1,015 -481
Operating free cash flow (€m) 1,757 +1,330 2,605 3,306
Repayment of lease debt -225 -8 -442 -9
Adjusted operating free cash flow** 1,532 +1,322 2,163 +3,297

* Sum of ‘Purchase of property, plant and equipment and intangible assets’ and ‘Proceeds on disposal of property, plant and equipment and intangible assets’ as presented in the consolidated cash flow statement.

** The “Adjusted operating free cash flow” is operating free cash flow after deducting the repayment of lease debt.

The Group generated an adjusted operating free cash flow in the Second quarter 2022 of 1,532 million euros, an increase of 1,322 million euros compared to last year, mainly driven by a positive change in working capital of 1,510 million euros. This was the fifth quarter in a row that the adjusted operating free cash flow was positive.

In € million 30 Jun 2022 31 Dec 2021
Net debt 6,036 8,216
EBITDA trailing 12 months 2,773 745
Net debt/EBITDA trailing 12 months 2.2 x 11.0 x

Both airlines able to reach positive operating margin

  Second quarter Half year
  2022 Change 2022 Change
Air France Group Operating result (€m) 133 +700 -230 +1,179
Operating margin (%) 3.3% +37.8 pt -3.4% +43.8 pt
KLM Group Operating result (€m) 262 +447 266 +787
Operating margin (%) 9.4% +24.8 pt 5.7% +30.1 pt
  • Significant improvement in Operating result for both airlines with operating margins close to 2019 levels

******

The external auditors carried out limited review procedures. Their limited review report was issued following the Board meeting.

The results presentation is available at www.airfranceklm.com on July 29, 2022 from 7:15 am CET.

A conference call hosted by Mr. Smith (CEO) and Mr. Zaat (CFO) will be held on July 29, 2022 at 08.30 am CET.            To connect to the conference call, please dial:

France: Local +33 (0)1 76 77 28 19Netherlands: Local +31 (0)20 703 8218UK: Local +44 (0)330 165 4012US: Local +1 323-701-0160

Confirmation code: 1131773

Investor Relations   Press
Frederic Kahane Michiel Klinkers  
    +33 1 41 56 56 00
frkahane@airfranceklm.com Michiel.klinkers@airfranceklm.com  

Income Statement

  Second quarter Half year
€m 2022 2021* Change 2022 2021* Change
Revenues from ordinary activities 6,707 2,750 +143.9% 11,152 4,910 +127.1%
Aircraft fuel -1,863 -520 +258.3% -2,858 -982 +191.0%
Chartering costs -93 -78 +19.2% -193 -147 +31.3%
Landing fees and air route charges -436 -245 +78.0% -784 -460 +70.4%
Catering -176 -68 +158.8% -319 -126 +153.2%
Handling charges and other operating costs -401 -211 +90.0% -722 -402 +79.6%
Aircraft maintenance costs -603 -447 +34.9% -1,118 -792 +41.2%
Commercial and distribution costs -230 -72 +219.4% -384 -131 +193.1%
Other external expenses -368 -254 +44.9% -702 -552 +27.2%
Salaries and related costs -1,820 -1,238 +47.0% -3,343 -2,406 +38.9%
Taxes other than income taxes -34 -29 +17.2% -80 -69 +15.9%
Other income and expenses 248 163 +52.1% 503 280 +79.6%
EBITDA 931 -249 nm 1,152 -877 nm
Amortization, depreciation and provisions -545 -504 +8.1% -1,116 -1,057 +5.6%
Income from current operations 386 -753 nm 36 -1,934 nm
Sales of aircraft equipment 39 -11 nm 39 -14 nm
Other non-current income and expenses -10 -849 -98.8% -15 -853 -98%
Income from operating activities 415 -1,613 nm 60 -2,801 nm
Cost of financial debt -136 -149 -8.7% -277 -339 -18.3%
Income from cash and cash equivalent 1 2 -50.0% 0 3 -100.0%
Net cost of financial debt -135 -147 -8.2% -277 -336 -17.6%
Other financial income and expenses -238 5 nm -286 -85 +236.5%
Income before tax 42 -1,755 nm -503 -3,222 -84.4%
Income taxes 283 272 +4.0% 278 263 +5.7%
Net income of consolidated companies 325 -1,483 nm -225 -2,959 -92.4%
Share of profits (losses) of associates 0 -9 -100.0% -1 -16 -93.8%
Net income for the period 325 -1,492 nm -226 -2,975 -92.4%
Non-controlling interests 1 -3 nm 2 -3 nm
Net income for the period – Group part 324 -1,489 nm -228 -2,972 -92.3%

* Restated figures include the change in accounting principles for pensions (interpretation of IAS19)

Consolidated Balance Sheet

Assets 30 Jun 2022  31 Dec 2021 
€m
Goodwill 223 222
Intangible assets 1,213 1,235
Flight equipment 10,521 10,466
Other property, plant and equipment 1,358 1,402
Right-of-use assets 5,439 5,148
Investments in equity associates 108 109
Other non-current financial assets 1,064 951
Non-current derivatives financial assets 304 143
Deferred tax assets 494 278
Total non-current assets 20,724 19,954
Assets held for sale 78 74
Other current financial assets 589 484
Current derivatives financial assets 954 469
Inventories 654 567
Trade receivables 2,045 1,511
Other current assets 1,133 966
Cash and cash equivalents 8,173 6,658
Total current assets 13,626 10,729
Total assets 34,350 30,683
Liabilities and equity 30 Jun 2022  31 Dec 2021 
In million euros
Issued capital 2,571 643
Additional paid-in capital 5,217 4,949
Treasury shares -25 -25
Perpetual bonds 1,389 3,151
Reserves and retained earnings -12,349 -12,542
Equity attributable to equity holders of Air France-KLM -3,197 -3,824
Non-controlling interests 10 8
Total Equity -3,187 -3,816
Pension provisions 1,558 1,939
Non-current return obligation liability and other provisions 4,272 4,055
Non-current financial liabilities 10,568 11,274
Non-current lease debt 3,335 2,924
Non-current derivatives financial liabilities 1 25
Deferred tax liabilities 3 1
Other non-current liabilities 2,465 2,555
Total non-current liabilities 22,202 22,773
Current return obligation liability and other provisions 838 885
Current financial liabilities 1,079 1,215
Current lease debt 851 825
Current derivatives financial liabilities 42 46
Trade payables 2,821 1,850
Deferred revenue on ticket sales 4,938 2,644
Frequent flyer programs 868 888
Other current liabilities 3,896 3,369
Bank overdrafts 2 4
Total current liabilities 15,335 11,726
Total equity and liabilities 34,350 30,683

Statement of Consolidated Cash Flows from 1st January until 30 June 2022

€m 30 Jun 2022 30 Jun 2021*
Net income -226 -2,975
Amortization, depreciation and operating provisions 1,116 1,057
Financial provisions 69 58
Loss (gain) on disposals of tangible and intangible assets -40 14
Loss (gain) on disposals of subsidiaries and associates - -26
Derivatives – non monetary result -20 -29
Unrealized foreign exchange gains and losses, net 240 86
Impairment 17 15
Other non-monetary items -90 762
Share of (profits) losses of associates 1 16
Deferred taxes -282 -265
Financial Capacity 785 -1,287
(Increase) / decrease in inventories -79 12
(Increase) / decrease in trade receivables -437 -268
Increase / (decrease) in trade payables 971 138
Increase / (decrease) in advanced ticket sales 2,276 489
Change in other receivables and payables 104 749
Change in working capital requirement 2,835 1,120
Net cash flow from operating activities 3,620 -167
Acquisition of subsidiaries, of shares in non-controlled entities - 2
Purchase of property, plant and equipment and intangible assets -1,491 -1,099
Proceeds on disposal of subsidiaries, of shares in non-controlled entities - 71
Proceeds on disposal of property, plant and equipment and intangible assets 476 565
Decrease (increase) in net investments, more than 3 months 6 85
Dividends received 1 -
Net cash flow used in investing activities -1,008 -376
Increase of equity 1,551 1,024
Perpetual -993 -
Coupons on perpetual -229 -
Issuance of debt 552 690
Repayment on debt -1,187 -750
Payments on debt on lease with bargain option -228 -385
Payments on lease debt -442 -433
New loans -175 -37
Repayment on loans 16 44
Net cash flow from financing activities -1,135 153
Effect of exchange rate on cash and cash equivalents and bank overdrafts (net of cash acquired or sold) 40 1
Change in cash and cash equivalents and bank overdrafts 1,517 -389
Cash and cash equivalents and bank overdrafts at beginning of period 6,654 6,422
Cash and cash equivalents and bank overdrafts at end of period 8,171 6,033

* Restated figures include the change in accounting principles for pensions (interpretation of IAS19)Return on capital employed (ROCE)

In million euros 30 Jun 2022 31 Mar 2022 31 Dec 2021 30* Sep 2021 30* Jun 2021 31* Mar 2021 31* Dec 2020 30* Sep 2020
Goodwill and intangible assets 1,437 1,473 1,457 1,456 1,464 1,479 1,445 1,470
Flight equipment 10,521 10,537 10,466 10,478 10,645 10,800 11,031 11,009
Other property, plant and equipment 1,358 1,378 1,402 1,418 1,453 1,476 1,548 1,535
Right of use assets 5,393 5,205 5,148 5,061 5,033 4,795 4,678 4,789
Investments in equity associates 108 107 109 172 166 223 230 224
Financial assets excluding marketable securities and financial deposits 162 158 157 147 147 146 146 135
Provisions, excluding pension, cargo litigation and restructuring -4,471 -4,239 -4,173 -4,180 -4,033 -4,083 -3,922 -4,002
WCR, excluding market value of derivatives -11,156 -9,589 -8,262 -7,995 -7,745 -6,410 -6,505 -6,894
Capital employed 3,352 5,030 6,304 6,557 7,130 8,426 8,651 8,266
Average capital employed (A) 5,311 8,118
Adjusted results from current operations 344 -4,119
- Dividends received 0 0
- Share of profits (losses) of associates -12 -45
- Normative income tax -80 1,211
Adjusted result from current operations after tax (B) 252 -2,953
ROCE, trailing 12 months (B/A) 4.7% -36.4%

* Restated figures include the change in accounting principles for pensions (interpretation of IAS19)

Net debt

  Balance sheet at
€m 31 Jun 2022 31 Dec 2021
Current and non-current financial liabilities 11,647 12,489
Current and non-current lease debt 4,186 3,749
Accrued interest -122 -128
Deposits related to financial liabilities -96 -99
Deposits related to lease debt -96 -85
Derivatives impact on debt -60 -14
Gross financial debt (A) 15,459 15,912
Cash and cash equivalents 8,173 6,658
Marketable securities 85 189
Cash secured 424 324
Triple A bonds 743 529
Bank overdrafts -2 -4
Net cash (B) 9,423 7,696
Net debt (A) – (B) 6,036 8,216

Adjusted operating free cash flow

  Second quarter Half year
€m 2022 2021 2022 2021
Net cash flow from operating activities 2,239 714 3,620 -167
Investment in property, plant, equipment and intangible assets -787 -632 -1,491 -1,099
Proceeds on disposal of property, plant, equipment and intangible assets 305 345 476 565
Operating free cash flow 1,757 427 2,605 -701
Payments on lease debt -225 -217 -442 -433
Adjusted operating free cash flow 1,532 210 2,163 -1,134

Bridge from EBITDA to Financial capacity

    Second quarter First Half
  2022 2021* 2022 2021*
EBITDA 931 -249 1,152 -877
Provisions (CO2 and other) -27 -70 -16 -28
Correction of spare parts inventory 1 2 3 3
Addition to pension provisions 33 60 65 137
Reversal to pension provisions (cash-out) -19 -40 -32 -83
Sales of tangible and intangible assets (excluding aeronauticals) 31 70 31 31
Income from operation activities - cash impact 950 -227 1,203 -817
Restructuring costs -68 -80 -125 -125
Other non-current income and expenses - -63 -2 -63
Cost of financial debt -139 -134 -283 -302
Financial income -3 -3 -8 -7
Realized foreign exchanges gain/loss -11 20 3 47
Termination of trading hedges - cash - -1 - -8
Settlements of forwards derivates - cash - -2 - -2
Current income tax - 1 -4 -2
Other financial charges & expenses - cash - -8 - -8
Other elements - - 1 -
Financial capacity 729 -497 785 -1,287

* Restated figures include the change in accounting principles for pensions (interpretation of IAS19)

Unit cost: net cost per ASK

  Second quarter Half year
  2022 2021* 2022 2021*
Revenues (in €m) 6,707 2,750 11,152 4,910
Income/(loss) from current operations (in €m) -/- -386 753 -36 1,934
Total operating expense (in €m) 6,321 3,503 11,116 6,844
Passenger network business – other revenues (in €m) -103 -77 -208 -131
Cargo network business – other revenues (in €m) -117 -99 -231 -190
Third-party revenues in the maintenance business (in €m) -345 -255 -642 -514
Transavia - other revenues (in €m) 10 - 12 -
Third-party revenues of other businesses (in €m) -8 -6 -13 -13
Net cost (in €m) 5,758 3,066 10,034 5,997
Capacity produced, reported in ASK* 72,127 39,657 130,192 74,254
Net cost per ASK (in € cents per ASK) 7.98 7.73 7.71 8.08
Gross change   3.2%   -4.6%
Currency effect on net costs (in €m)   -70   -118
Change at constant currency   0.9%   -6.4%
Fuel price effect (in €m)   492   668
Net cost per ASK on a constant currency and fuel price basis (in € cents per ASK) 7.98 9.15 7.71 9.14
Change at constant currency and fuel price basis   -12.7%   -15.6%

* Restated figures include the change in accounting principles for pensions (interpretation of IAS19)(1) The capacity produced by the transportation activities is combined by adding the capacity of the Passenger network (in ASK) to that of Transavia (in ASK).

Group resultsAir France Group

  Second quarter Half year
  2022 Change 2022 Change
Revenue (in €m) 4,062 +146.7% 6,743 +125.8%
EBITDA (in €m) 444 +726 422 +1,217
Operating result (in €m) 133 +700 -230 +1,179
Operating margin (%) 3.3% +37.8 pt -3.4% +43.8 pt
Operating cash flow before WCR and restructuring cash out (in €m) 343 +741 255 +1,274
Operating cash flow (before WCR and restructuring) margin 8.4% +32.6 pt 3.8% +37.9 pt

KLM Group

  Second quarter Half year
  2022 Change 2022 Change
Revenue (in €m) 2,782 +130.5% 4,685 +119.2%
EBITDA (in €m) 495 +462 729 +807
Operating result (in €m) 262 +447 266 +787
Operating margin (%) 9.4% +24.8 pt 5.7% +30.1 pt
Operating cash flow before WCR and restructuring cash out (in €m) 469 +525 667 +836
Operating cash flow (before WCR and restructuring) margin 16.9% +21.5 pt 14.2% +22.2 pt

NB: Sum of individual airline results does not add up to Air France-KLM total due to intercompany eliminations at Group level

Group fleet at 30 June 2022

Aircraft type AF(incl. HOP) KL (incl. KLC & MP) Transavia Owned Finance lease Operating lease Total In operation Change / 31/12/21
B777-300 43 16   19 16 24 59 59  
B777-200 19 15   27   7 34 33 -3
B787-9 10 13   4 7 12 23 23  
B787-10   6   2 4   6 5  
A380-800 8     4 1 3 8    
A350-900 18     3 7 8 18 18 6
A330-300   5       5 5 5 1
A330-200 15 6   11   10 21 21  
Total Long-Haul 113 61 0 70 35 69 174 164 4
B737-900   5   5     5 5  
B737-800   31 95 33 8 85 126 126 10
B737-700   10 4 7   7 14 14  
A321 19     11   8 19 19  
A320 41     4 4 33 41 40 -2
A319 25     12   13 25 24 -4
A318 12     6   6 12 11 -1
A220-300 10     7   3 10 9 3
Total Medium-Haul 107 46 99 85 12 155 252 248 6
Canadair Jet 1000 9     9     9 6 -5
Canadair Jet 700                  
Embraer 195 E2   12       12 12 12 5
Embraer 190 19 30   16 5 28 49 49 2
Embraer 175   17   3 14   17 17  
Embraer 170 13     10   3 13 13 -2
Embraer 145 2     2     2    
Total Regional 43 59 0 40 19 43 102 97 0
B747-400ERF   3   3     3 3  
B747-400BCF   1   1     1 1  
B777-F 2         2 2 2  
Total Cargo 2 4 0 4 0 2 6 6 0
                   
Total 265 170 99 199 66 269 534 515 10

SECOND QUARTER 2022 TRAFFIC

Passenger network activity*

    Q2     Year to date
Total Passenger network* 2022 2021 Variation   2022 2021 Variation
Passengers carried (‘000s) 17,556 5,853 199.9%   29,497 10,321 185.8%
Revenue pax-kilometers (m RPK) 52,479 15,931 229.4%   91,346 29,362 211.1%
Available seat-kilometers (m ASK) 61,697 36,417 69.4%   114,268 70,003 63.2%
Load factor (%) 85.1% 43.7% 41.3   79.9% 41.9% 38.0
               
Long-haul              
Passengers carried (‘000s) 5,771 1,769 226.2%   10,155 3,338 204.2%
Revenue pax-kilometers (m RPK) 42,070 12,199 244.9%   74,396 23,163 221.2%
Available seat-kilometers (m ASK) 49,285 30,625 60.9%   92,525 59,951 54.3%
Load factor (%) 85.4% 39.8% 45.5   80.4% 38.6% 41.8
               
North America              
Passengers carried (‘000s) 2,289 423 440.6%   3,530 698 406.1%
Revenue pax-kilometers (m RPK) 16,330 3,113 424.6%   25,386 5,143 393.6%
Available seat-kilometers (m ASK) 19,139 9,005 112.5%   32,291 16,068 101.0%
Load factor (%) 85.3% 34.6% 50.8   78.6% 32.0% 46.6
               
Latin America              
Passengers carried (‘000s) 767 171 347.8%   1,442 366 294.2%
Revenue pax-kilometers (m RPK) 7,215 1,650 337.3%   13,726 3,514 290.7%
Available seat-kilometers (m ASK) 8,144 5,165 57.7%   15,801 10,457 51.1%
Load factor (%) 88.6% 32.0% 56.6   86.9% 33.6% 53.3
               
Asia / Middle East              
Passengers carried (‘000s) 859 327 163.0%   1,493 601 148.2%
Revenue pax-kilometers (m RPK) 6,117 2,190 179.2%   10,508 4,038 160.2%
Available seat-kilometers (m ASK) 7,390 7,103 4.0%   14,610 14,348 1.8%
Load factor (%) 82.8% 30.8% 51.9   71.9% 28.1% 43.8
               
Africa              
Passengers carried (‘000s) 936 537 74.1%   1,751 954 83.6%
Revenue pax-kilometers (m RPK) 5,568 2,948 88.9%   10,360 5,214 98.7%
Available seat-kilometers (m ASK) 6,839 5,287 29.4%   13,137 10,088 30.2%
Load factor (%) 81.4% 55.8% 25.7   78.9% 51.7% 27.2
               
Caribbean / Indian Ocean              
Passengers carried (‘000s) 920 310 196.5%   1,939 719 169.8%
Revenue pax-kilometers (m RPK) 6,840 2,298 197.7%   14,415 5,255 174.3%
Available seat-kilometers (m ASK) 7,773 4,065 91.2%   16,687 8,990 85.6%
Load factor (%) 88.0% 56.5% 31.5   86.4% 58.4% 27.9
               
Short and Medium-haul              
Passengers carried (‘000s) 11,784 4,084 188.5%   19,342 6,983 177.0%
Revenue pax-kilometers (m RPK) 10,409 3,731 179.0%   16,950 6,199 173.4%
Available seat-kilometers (m ASK) 12,412 5,792 114.3%   21,743 10,052 116.3%
Load factor (%) 83.9% 64.4% 19.4   78.0% 61.7% 16.3

* Air France and KLM

Transavia activity        

    Q2     Year to date
Transavia 2022 2021 Variation   2022 2021 Variation
Passengers carried (‘000s) 5,247 1,175 346.8%   7,828 1,527 412.8%
Revenue pax-kilometers (m RPK) 8,886 1,939 358.2%   13,154 2,522 421.6%
Available seat-kilometers (m ASK) 10,430 3,240 221.9%   15,924 4,251 274.6%
Load factor (%) 85.2% 59.9% 25.3   82.6% 59.3% 23.3

Total group passenger activity**

    Q2     Year to date
Total group** 2022 2021 Variation   2022 2021 Variation
Passengers carried (‘000s) 22,803 7,028 224.5%   37,326 11,848 215.0%
Revenue pax-kilometers (m RPK) 61,365 17,870 243.4%   104,499 31,884 227.7%
Available seat-kilometers (m ASK) 72,127 39,657 81.9%   130,192 74,254 75.3%
Load factor (%) 85.1% 45.1% 40.0   80.3% 42.9% 37.3

** Air France, KLM and Transavia

Cargo activity

    Q2     Year to date
Total Group 2022 2021 Variation   2022 2021 Variation
Revenue tonne-km (m RTK) 1,731 2,087 (17.0%)   3,497 4,161 (16.0%)
Available tonne-km (m ATK) 3,341 2,623 27.4%   6,315 5,311 18.9%
Load factor (%) 51.8% 79.6% (27.7)   55.4% 78.3% (23.0)

Air France activity

    Q2     Year to date
Total Passenger network activity 2022 2021 Variation   2022 2021 Variation
Passengers carried (‘000s) 10,344 3,606 186.8%   17,449 6,652 162.3%
Revenue pax-kilometers (m RPK) 30,995 9,155 238.6%   54,082 17,723 205.1%
Available seat-kilometers (m ASK) 36,621 17,637 107.6%   67,491 34,052 98.2%
Load factor (%) 84.6% 51.9% 32.7   80.1% 52.0% 28.1
Long-haul              
Passengers carried (‘000s) 3,562 1,093 225.8%   6,331 2,142 195.6%
Revenue pax-kilometers (m RPK) 25,065 7,017 257.2%   44,517 14,010 217.8%
Available seat-kilometers (m ASK) 29,459 14,336 105.5%   55,192 28,252 95.4%
Load factor (%) 85.1% 48.9% 36.1   80.7% 49.6% 31.1
Short and Medium-haul              
Passengers carried (‘000s) 6,781 2,513 169.9%   11,116 4,510 146.5%
Revenue pax-kilometers (m RPK) 5,930 2,138 177.3%   9,565 3,713 157.6%
Available seat-kilometers (m ASK) 7,162 3,301 117.0%   12,300 5,800 112.1%
Load factor (%) 82.8% 64.8% 18.0   77.8% 64.0% 13.7
    Q2     Year to date
Cargo activity 2022 2021 Variation   2022 2021 Variation
Revenue tonne-km (m RTK) 889 906 (1.8%)   1,796 1,812 (0.8%)
Available tonne-km (m ATK) 1,861 1,268 46.7%   3,518 2,602 35.2%
Load factor (%) 47.8% 71.4% (23.6)   51.1% 69.6% (18.6)

KLM activity

    Q2     Year to date
Total Passenger network activity 2022 2021 Variation   2022 2021 Variation
Passengers carried (‘000s) 7,212 2,247 220.9%   12,049 3,669 228.4%
Revenue pax-kilometers (m RPK) 21,484 6,776 217.1%   37,264 11,639 220.2%
Available seat-kilometers (m ASK) 25,077 18,780 33.5%   46,777 35,951 30.1%
Load factor (%) 85.7% 36.1% 49.6   79.7% 32.4% 47.3
Long-haul              
Passengers carried (‘000s) 2,209 676 226.8%   3,823 1,196 219.7%
Revenue pax-kilometers (m RPK) 17,005 5,183 228.1%   29,878 9,153 226.4%
Available seat-kilometers (m ASK) 19,827 16,289 21.7%   37,333 31,700 17.8%
Load factor (%) 85.8% 31.8% 53.9   80.0% 28.9% 51.2
Short and Medium-haul              
Passengers carried (‘000s) 5,003 1,572 218.3%   8,225 2,473 232.6%
Revenue pax-kilometers (m RPK) 4,479 1,593 181.2%   7,385 2,486 197.1%
Available seat-kilometers (m ASK) 5,250 2,491 110.7%   9,443 4,251 122.1%
Load factor (%) 85.3% 63.9% 21.4   78.2% 58.5% 19.7
    Q2     Year to date
Cargo activity 2022 2021 Variation   2022 2021 Variation
Revenue tonne-km (m RTK) 842 1,181 (28.7%)   1,701 2,349 (27.6%)
Available tonne-km (m ATK) 1,480 1,355 9.2%   2,797 2,710 3.2%
Load factor (%) 56.9% 87.2% (30.3)   60.8% 86.7% (25.9)

1 Change versus 31 Dec 2021

Attachment

  • AFKL Q2_2022 Press release EN
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