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Air France-KLM to limit long-haul growth

By control on July 28, 2011

Due to high fuel prices and what they call an uncertain operating environment throughout the world, officials at Air France-KLM have decided to scale back long-haul capacity growth for the next half of the year. The organization's fuel costs for the second quarter stood at €1.67 billion, a 16.1-percent, year-over-year increase.

By bringing capacity growth down 2.4 percentage points to 2.7 percent, officials maintain they will end 2011 with positive operating results. Worries over the air transport environment in Japan, Africa, the Middle East contributed to the decision. The current crisis in Europe also played a role.

"Activity over the quarter, and particularly in June, was strongly affected by the difficult situation in some important markets for the group," a company spokesman wrote in Air France-KLM's quarterly report. "The cargo business was impacted by the crisis in Japan as well as a situation of overcapacity on China departures."

The decision to limit capacity is borne out in Air France-KLM's cargo numbers for the second quarter of 2011. Capacity experienced a 6.2-percent year-over-year growth spurt, with traffic only growing by 1.9 percent.

Money is coming in, however; total cargo revenues ended the second quarter at €799 million, a 3.2-percent increase over the same time period in 2010. The company's maintenance business also performed well, turning in a year-over-year increase of 7.4 percent.

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