Air France-KLM posts 1.55b net loss

Air France-KLM posted record losses of ?1.55 billion (?1 = RM4.04) on Wednesday, as a shock new book on its safety record added to the problems facing Europe's biggest airline.

The giant net loss for the 2009-2010 financial year came as the Franco-Dutch carrier grappled with the global economic crisis and the fallout from a deadly accident last year.

Slumping air traffic, particularly for cargo, drove the company to its biggest loss since Air France and KLM merged in 2004. The latest results followed ?811 million (?1 = RM4.04) in red ink the previous year.

"2009-10 will go on record as our 'annus horribilis.' The global 'economic crisis had a profound effect on the entire airline industry," chief executive Pierre-Henri Gourgeon said in a statement.
He noted the company also had to grapple with an accident last June that saw Air France Flight 447 from Rio to Paris break apart and plunge into the Atlantic, killing all 228 people on board.

Against that backdrop, the company scrapped its dividend payment for the 2009-2010 financial year.

Gourgeon said restructuring of the airline's cargo business began bearing fruit in the fourth quarter, although the company's fuel bill rose for the first time during the year as the price of jet fuel surged 31 per cent.

The figures were released as the company's safety record came under harsh scrutiny with "The Hidden Face of Air France," an investigation by journalist Fabrice Amedeo into what he alleges are failures in Air France's management culture leading to a lax attitude to flight safety.

The carrier rejects the allegations.

Air France flights have fallen victim to several accidents in recent years and, according to the French daily Liberation, statistics compiled online rank its safety record as only the 65th best in the world.

And with 1,783 fatalities in its history, according to a tally compiled by the Swiss-based website "Aircraft Crashes Record Office," Air France has been the second deadliest airline for passengers after Russia's Aeroflot.

Germany's Lufthansa, which is of similar size and age, is in 43rd place.

"Air France has a fleet of ultramodern planes, and its pilots are among the best in the world... but its safety statistics are those of a second division company," Amedeo wrote in his book.

Gourgeon told reporters the book "is not worth a response," insisting that safety was the "number one concern of Air France." The company said separately that its safety standards "meet the most stringent requirements in the international aviation industry," noting it was continuously working on improving flight safety.

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[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]