Air France-KLM, BA Detail Annual, Ash Losses

Air France-KLM unveiled an operating loss of €1.28 billion for the year ending March 31 last week and estimated that it has subsequently lost €160 million as a direct result of the ash crisis that started in April.

British Airways also announced last week a full-year pre-tax loss for the same period of £531 million compared with a loss of £401 million in 2008-09. The airline lost six days of flying to the ash crisis in April, leading to a 22.4 percent fall in revenue passenger kilometers. Further disruption from the ash and a cabin crew strike has followed this month. BA said that the initial shutdown caused by the ash crisis cost it £15 million to £20 million per day.

More optimistically, both airlines improved yields in the first three months of 2010. Air France-KLM said its revenue rose 3.5 percent compared to the same period in the previous year on a constant currency basis, although this did not prevent an operating loss for the period of €497 million. The company is aiming to break even for 2010-11, in part through maintaining capacity increases at no more than 1 percent.

BA, which reported its final annual figures as a single airline before merging with Iberia later this year, said its operating losses for the first three months of 2010 reduced from £309 million to £145 million. It is targeting revenue growth of 6 percent for the current financial year. "Passenger revenue is recovering with increased corporate activity, especially across the Atlantic," a statement from the airline said.

As well as the synergies of the merger with Iberia, BA also hopes to boost income by launching a transatlantic joint venture with American Airlines. "We look forward to receiving final approval from the Department of Transportation and European Union by the summer," said BA CEO Willie Walsh.