Air France-KLM: a new strategic plan awaits as 2Q marks another step on the recovery path

Air France-KLM's recovery continued with another year on year improvement in quarterly results in 2Q2014, mainly because it cut unit costs more quickly than the fall in unit revenues. Following its early Jul-2014 profit warning, it has made no further changes to its FY2014 EBITDA target, which remains EUR2.2-2.3 billion, and it continues to target net debt of EUR4.5 billion at the end of 2015 (versus EUR5.4 billion at the end of Jun-2014).

On the strategic front, Air France-KLM is accelerating the growth of its Transavia LCC subsidiary, although this unit is still loss-making, and is re-grouping its Air France point to point and Hop regional operations into a single business unit. In addition, it is examining further reductions to its full-freighter fleet, beyond those previously announced.

Air France-KLM is also working on its next five year strategic plan, to follow its Transform 2015 restructuring plan. To be unveiled in Sep-2014, the "Perform 2020" plan will focus on growth and competitiveness.