Economy

Air France-KLM revenue hit by France's yellow vest street protests

Air France - Credit Bloomberg

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The Yellow Vests anti-government demonstrations shaved around EUR 15 million ($17 million) off monthly sales, the Paris-based company said Wednesday in a statement on traffic.

Thursday 10, January 2019

(Bloomberg) --Air France-KLM Group said December revenue was crimped by violent French street protests, capping a turbulent year for a carrier struggling to get past a damaging labour dispute and revamp of top management.

The number of passengers carried by Air France and local unit Hop! fell 0.2 per cent compared with December 2017, contrasting with 7.2 per cent growth at Dutch arm KLM.

The figures drove Air France-KLM shares down as much as 3.8 per cent and highlighted the performance gap to its biggest rivals. Group passenger traffic rose 3.5 per cent in 2018, less than half the 7.1 per cent advance reported by rival IAG, which is expanding after defeating a strike by British Airways cabin crew and cutting jobs to pare costs at Spanish unit Iberia.

The street protests added to challenges for Chief Executive Officer Ben Smith, who took charge in September and is seeking to end a pay dispute with French pilots without alienating their counterparts in the Netherlands. Crew walkouts last year led to the ouster of his predecessor and hurt earnings.

Higher profit margins at KLM have been a source of tension since Air France acquired the Dutch business in 2004. The unit boosted revenue passenger kilometres -- the number of customers times the distance flown -- by four per cent in 2018, compared with a gain of just 1.9 per cent at Air France and Hop!, according to the statement.

Smith is expected to unveil his strategy in the next few months. The Canadian struck an initial deal with labour groups in October, but talks with powerful pilot unions continue.

Air France-KLM shares fell 30 per cent last year, compared with a five per cent drop at IAG and a near 36 per cent slide at Germany’s Deutsche Lufthansa, which reports traffic figures on Thursday.

 

TAGS : Air France-KLM, Yellow-vest protest

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