* Q1 operating loss 445 mln eur vs 532 mln yr-ago
* Confirms financial targets for year
* Wins contract worth over $1 billion from Air China
* To sign codeshare agreement with Air Berlin
* CEO doesn't rule out re-investing in Alitalia
(Adds details, CEO comments, background)
By Cyril Altmeyer
PARIS, April 30 Air France-KLM
narrowed its losses in the first quarter on the back of cost
cuts and lower fuel prices, and announced a breakthrough
contract in China for its maintenance business, the France-Dutch
group's only profitable division.
Europe's second-largest network carrier by revenue
reaffirmed its financial targets for the year in the face of
"tough" conditions, as first-quarter operating losses declined
to 445 million euros ($615 million) from 532 million a year
Revenue rose 2.2 percent to 5.554 billion euros, and EBITDA
losses (earnings before interest, tax, depreciation and
amortisation) more than halved to 50 million.
"We weren't helped by the economic climate, nor did it get
worse, but there is no oxygen from that side of our business,"
Chief Executive Alexandre de Juniac said.
Air France-KLM said it had won a contract worth over $1
billion from Air China to maintain 20 Boeing
777 aircraft in China in a deal that could be extended to eight
De Juniac told reporters Air France expected to sign a
codeshare agreement with Air Berlin in the coming weeks
and did not rule out re-investing in Italian carrier Alitalia,
which is now negotiating with Abu Dhabi's Etihad after Air
France-KLM refused to take part in a capital increase last year.
"We haven't changed our position. We put conditions on the
table and we understand Etihad has done the same, probably more
severe ones than ours, which for the time being have not been
satisfied," de Juniac said.
"The difference is that Etihad is ready to put up money that
we don't have."
Asked whether Air France-KLM could re-invest in Alitalia if
Etihad managed to reach a deal with the Italian carrier, he
said: "There's no reason not to ask ourselves that question,
especially if an agreement is reached on Etihad's terms, which
are similar to ours.
"Then it also has to be compatible with our development
plans. We are not closing the door."
"ACT OF CONTEMPT"
De Juniac hit out at plans by French pilots to hold five
hours of strikes per day between May 3 and May 30 over their
opposition to a French law on strike practices, after the
airline said on Tuesday it would have to cancel flights.
The pilots want to end a law that forces them to give 48
hours' notice of any strike plans, but the airline says their
beef should be with the government and that passengers will be
"It is an act of contempt towards passengers and other
staff," de Juniac said. "There have been sacrifices, with people
leaving (their jobs), and when I see that on top of this we have
to endure a strike that has nothing to do with the company, then
there is good reason to be annoyed."
Air France-KLM said its Transform 2015 restructuring plan
was "fully on track," but that it was revising its operations to
Venezuela, which is embroiled in a growing dispute with foreign
airlines over the non-payment of local revenue.
The group reiterated a target for 2.5 billion euros in
EBITDA for 2014, subject in part to measures to compensate for
weak cargo demand and adjustments on the Caracas route. It said
it was on course to reduce net debt to 4.5 billion euros in
($1 = 0.7237 Euros)
(Additional reporting by Tim Hepher; Editing by James Regan)