Air France-KLM Group first quarter 2022 results show EBITDA positive at 221 million euros, better than expected

First quarter:

• EBITDA positive at 221 million euros
• Net income at -552 million euros, showing a 930 million euros improvement compared to the same quarter last year, supported by a revenue development at 4,445 million euros, which is 2,284 million euros higher than last year
• Adjusted operating free cash flow positive at 630 million euros thanks to strong ticket sales. Compared to the same quarter in 2021 the adjusted operating free cash flow improved by 1,974 million euros
• Net debt at 7.7 billion euros, down by 0.6 billion euros compared to end of 2021 thanks to a positive adjusted operating free cash flow

Group CEO Mr Benjamin Smith said: “The performance of the Air France-KLM Group over the first quarter of 2022 confirms that recovery is here. In spite of a challenging context, with the continued effect of the Omicron variant, the situation in Ukraine and the sharp increase in fuel prices, the Group posted once again a positive EBITDA and recorded strong bookings for the following quarters. March was notably very encouraging with a significant increase in demand for corporate and premium traffic, complementing the already strong leisure and VFR (visiting friends and relatives) demand across our worldwide network. This paves the way for a successful summer season in all our activities, which we continue to strengthen through our extensive transformation plan.”

Outlook:

Context:

The start of the First quarter was hampered by the Omicron variant, mainly on the short- and medium-haul, while the outbreak of the Ukraine war resulted in higher fuel prices and a slowdown in bookings during a very short period.

The recovery accelerated in March with highly dynamic bookings for the summer season.

Capacity

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

• 80% to 85% in the second quarter of 2022
• 85% to 90% in the third quarter of 2022

Operating result expected

• Break-even in the second quarter
• Significantly positive in the third quarter

Cash

As of March 31 2022, the Group has a sufficient 10.8 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% related to IT and ground.

Air France-KLM made progress on the equity strengthening measures

Thanks to KLM’s strong performance, KLM’s State-backed RCF has been partially repaid on May 3rd for 311 million euros. In addition, KLM expects to strengthen its balance sheet with positive results. Further equity measures are being contemplated for the coming year.
Progress has been made on refinancing up to 500 million euros of Air France’s assets, mainly through quasi-equity instruments to redeem French State aid. Air France is currently engaged in advanced discussions with various partners.

The Group is closely monitoring capital strengthening measures such as a capital increase with pre-emptive rights for shareholders, as well as the issuance of quasi-equity instruments such as straight and convertible perpetual bonds, to further restore equity and accelerate the State aid redemption.

In total, these measures including the refinancing of Air France’s assets could represent up to 4.0 billion euros. The timing and sizing of each transaction will depend on market conditions and remain subject to the approval of the European Commission as well as legal and regulatory approvals.

May 05, 2022