Air France-KLM CEO says traffic volumes good despite Brussels attacks

MUNICH - Reuters

AFP photo

Air France-KLM is getting good traffic volume and has seen no major impact from attacks on the Brussels airport and underground system last week, its chief executive told Reuters.

The Franco-Dutch airline took a 120 million euro ($137 million) hit on sales in the last two months of 2015 from attacks in Paris in November, where gunmen targeted restaurant and concert goers, killing 130 people. Airline and travel stocks dropped again after the suicide bomb attacks in Brussels on March 22 that killed 32 people.

“So far we have not seen a significant impact from the Brussels event on our traffic,” Air France-KLM Chief Executive Alexandre de Juniac told Reuters in an interview in Munich, though he added it was too early to say how much it could end up costing.

De Juniac said Air France-KLM was still feeling the effects of the Paris attacks and that traffic from Japan was the worst affected.

“China and the North America are still suffering a little. But these markets are recovering. Japan is not recovering,” he said, adding that the carrier was keen to agree partnerships in Asia, similar to a joint venture with Delta on North Atlantic routes, to boost its position there.

Still, overall, traffic volumes are good at the moment, he said, helped by the low oil price, which meant it swung to a profit for 2015.

Like rival Lufthansa, the Franco-Dutch group is expanding low-cost operations via one of its units, Transavia, a Dutch budget carrier founded in 1965 which has been wholly owned by KLM since 2003.

The group wants to expand Transavia in France, which offers a bigger domestic market than the Netherlands, but it is facing opposition from French pilots over the contracts on offer.

“We would welcome to have the same agreement for Transavia France so we could open bases in other countries,” de Juniac said.

Transavia’s CEO said the carrier was aiming to bring its cost base down to a level similar with rivals easyJet and IAG-owned Vueling.

“We have room for improvement. But our cost base is half of that what Air France-KLM has,” Transavia CEO Mattijs ten Brink said.

It would also like to grow quickly so that it could take part in consolidation of the low-cost sector in Europe, and plans to make a decision this summer on new destinations and bases for 2017.

Lufthansa’s Eurowings is aiming to overtake rivals such as Norwegian and Wizz to become Europe’s third largest low cost carrier behind Ryanair and easyJet.

“We don’t have any concrete goal in terms of market position... But if we could be in the top 5 in a couple of years that would be good,” ten Brink said.