It’s the Scottish shower for Air France. In recent weeks, the re-containment measures, adopted across Europe, have left hopes of a resumption, at least punctually, of activity for the Christmas holidays. A bad blow for the company which had anticipated “Despite the crisis, a growth potential of 21% between November 2020 and February 2021” towards the Antilles and Reunion.
At the same time, announcements of the near development of several vaccines against the coronavirus, caused the stock market price of the Franco-Dutch company to skyrocket. In one week, the Air France-KLM share gained 27% to settle a little above 4 euros.
Nevertheless, even a little reinvigorated on the markets, Air France-KLM already knows that the next few months will be very difficult. Its activity is at its lowest. And the prospects for a restart are receding. “The recovery scenarios must be revised downwards and the short and medium term prospects are not encouraging”, admits the management. While it predicted a decline in activity in December, only 20% compared to 2019, Air France now expects a decline of 60%.
According to our information, the company would lose 15 million euros per day. “We are getting closer to the amount of losses that we experienced during the first phase of the epidemic”, worries a trade unionist. It must be said that Air France flights ring hollow with “An average occupancy rate of 30%”, reports another union leader of the company. The only consolation is the very good performance of freight, which now brings in 48% of income from long-haul flights.
The company will not escape a recapitalization
At the rate of its daily losses, the 7.4 billion euros already provided by the State (and the 3.4 billion provided by the Netherlands) “Melt like snow in the sun”, recalls Christelle Auster, president of the National Union of Commercial Flight Crews (SNPNC). By spring 2021, the boxes will be empty.
In short, the company will not escape a recapitalization. However, to attract the markets, Air France must also, as indicated by a union leader, “Bring back cash to present a more flattering balance sheet”. Since the start of the crisis, the airline’s debt has exploded and now exceeds 12 billion euros.
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