Transavia passenger revenue up 8% - financial highlights for three months ended 30-Sep-2013:
Transavia operating profit down 6% in 3Q2013
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Air France-KLM: margin grows, but performance and profit below IAG & Lufthansa airline groups.
The first of Europe's big three legacy airline groups to report results for 2Q2016, Air France-KLM improved its operating margin and still expects higher operating free cash flow for FY2016. However, it remains less profitable than the other two big legacy groups, IAG and Lufthansa, and is still reluctant to give a profit target for FY2016.
Air France-KLM's commentary on the outlook implies that it now expects to make a lower profit this year than previously anticipated, even if this is likely to be higher than in 2015. In effect, this completes a full set of profit warnings from the big three legacy groups, since IAG and Lufthansa have already signalled a lowering of their profit outlook for 2016.
By contrast, LCCs have generally been more positive in their 2Q reporting and outlook (with the notable exception of easyJet). All European airlines have highlighted a weakening outlook for unit revenue, due to industry capacity growth plus geopolitical and macroeconomic risks, but low cost airlines such as Ryanair and Wizz Air appear better placed to cope with this outlook, given their lower unit costs. At this point in the cycle, new Air France-KLM CEO Jean-Marc Janaillac will need to balance growth against productivity.
Air France-KLM: Attempting to rearrange the deckchairs while pilots remain on full steam ahead
Air France-KLM's latest strategic project, 'Trust Together', follows its Transform 2015 and Perform 2020 programmes. In fact, it complements Perform 2020, rather than replacing it, at least until fuller details are announced in 2Q2017. After years of financial under-performance and market share erosion by Gulf airlines on long haul and LCCs on short/medium haul, CEO Jean Marc Janaillac aims to regain the offensive with this project.
But, in the absence of a substantial change of heart by the group's unions, there is little to suggest any "new" initiative will have a greater impact than its predecessors. The mere fact that Mr Janaiiac is forced to deny that the new long haul airline, codenamed "Boost", will be positioned as "low cost" is a clear enough indication of the task ahead. Indeed, to consider establishing anything else would be irrelevant in today's world.
Presumably so as not to rock the union boat plans are for only an ineffectual 10 aircraft by 2020. Just as with its short/medium haul LCC, Transavia, the scale and scope of the new long haul airline are likely to be subject to negotiation with Air France pilots. Transavia itself will now focus on routes from France and the Netherlands, implying an end to the troubled plans for Transavia Europe.