Air France-KLM Group, Air France and KLM are holding in-depth discussions with their respective governments and financial ins...
April 09 2020 - 2:01PM
Air France-KLM Group, Air France and KLM are holding in-depth
discussions with their respective governments and financial
institutions
Roissy, 9 April 2020
Air France-KLM Group, Air France and KLM
are holding in-depth discussions with their respective
governments and financial institutions
From the start of the COVID-19 crisis, the Group
has implemented adequate measures to protect its passengers and
staff, as well as to preserve its financial sustainability. In view
of increasingly strict measures taken by many countries, including
restrictions on travel opportunities or border closures, the Air
France-KLM Group has drastically reduced its flight activity, which
over the next few months should be less than 10% of last year’s
level.
The Group has implemented strong measures since
the beginning of the crisis which include, amongst others:
- Negotiation with governments of payment deferral for taxes
(civil aviation, solidarity…), social contribution and various
charges;
- Negotiation with lessors and airports of payment deferral;
- Cost reduction measures, estimated at this stage at €500
million in 2020, an increase of €300 million compared to previous
announcements ;
- The possibility of early retirement of certain sub-fleets of
aircraft;
- Implementation by Air France of partial activity measures and
application by KLM for the ‘Temporary Emergency Bridging Measure
for Sustained Employment’ (NOW), with an impact estimated at this
stage at around €1.1 billion for 2020;
- Review of the investment plan to reduce the capital expenditure
plan by €700 million in 2020, an increase of €350 million compared
to previous announcements, to which will be added the impact of the
decline in own and third-party activity on the amount of
maintenance investments.
In solidarity with the all employee groups, the
Air France-KLM Board members, Chair and CEO will also participate
in the effort in line with the measures applicable to the employees
of the Group, with a similar reduction of their remuneration.
As the crisis continues, the conditions for a
recovery remain uncertain, both in terms of our air operations, but
more generally in terms of the timetable for economic and demand
recovery.
Our current best estimates, incorporating the
above-mentioned measures, show that in the absence of additional
financing, a liquidity requirement is expected in the third quarter
of 2020.
As a result, the Air France-KLM Group, Air
France and KLM, have entered into in-depth discussions with their
respective governments and financial institutions in order to grant
the resources that will enable them to secure and sustain adequate
levels of liquidity by all means, notably within the framework of
the European Commission's Temporary Framework on State Aid in force
published on 19 March 2020.
At this stage, given the various options
currently being considered and the quality of the discussions with
the two States and financial institutions, the Air France-KLM Group
is confident that it will be able to obtain additional financing to
meet all its future financial obligations and enable it to ensure
the recovery of its activity beyond the current crisis.
"We are facing an unprecedented crisis affecting
without exception the airline industry, which is causing a great
deal of uncertainty about the outlook for air transport," said
Benjamin Smith, Chief Executive Officer of Air France-KLM. "Since
the beginning of this crisis, the Air France-KLM Group has done
everything possible to ensure the health safety of its employees
and customers and, on the financial side, to preserve its
short-term liquidity and prepare for the future. Emergency measures
have been rapidly implemented to reduce our costs and investments.
I salute the exceptional commitment of our employees, who are
giving their best in these difficult times, particularly the
operational teams who are enabling the repatriation flights of our
fellow citizens, as well as the transport of medical equipment to
France and the Netherlands. It is now clearer than ever that
support from our both Dutch and French governments is needed to
meet our cash requirements and enable us to continue our operations
once the crisis is over. Discussions with them and financial
partners are ongoing, and I am confident in their willingness to
support us and the future of the Air France-KLM Group, a key player
for employment and the greater economies of our two nations, whose
flags our airlines fly around the world. "
Investor
Relations
Press
Olivier
Gall
Wouter van
Beek
+33 1 49 89 52 59
+33 1 49 89 52
60
+33 1 41 56 56 00
olgall@airfranceklm.com
wouter-van.beek@airfranceklm.com
Website: www.airfranceklm.com
- Press release in-depth discussions with governments and
financial institutions VE
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