Air France-KLM Plans Capacity Growth Pending Vaccination Rollout in Europe

Air France-KLM plans to "progressively ramp up capacity" in the coming months in line with European vaccination rates, even as both France and the Netherlands continue to face Covid-19 lockdowns.

For now, the second quarter has started out "similar to the first quarter," with most bookings coming in with little lead time, according to the group. Passenger revenue in the first quarter was down 73.3 percent year over year to €1.02 billion, and capacity was down 46.2 percent. The group also continues to be issuing a high volume of refunds, with €550 million issued during the first quarter, making a grand total of €2.8 billion since the onset of the pandemic.

Although the vaccination pace in Europe has been slower than the United States, which has seen a stronger improvement at least in domestic leisure demand, Air France-KLM expects to build up capacity over the next two quarters. For the second quarter, it projects capacity will be 50 percent of levels in the second quarter of 2019, and that will increase to 55 percent to 65 percent of 2019 levels in the third quarter.

The group reported a net loss of €1.5 billion in the first quarter, and improvement of €320 million compared with the first quarter of 2020. Last month, Air France-KLM announced it would be getting as much as €4 billion in a rescue plan from the French government, which "allows us to look forward to the summer season with greater confidence, hoping that the progress of the vaccination roll-out worldwide and the implementation of travel passes will allow borders to reopen and traffic to recover," according to Air France-KLM CEO Benjamin Smith.

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