PARIS, Sept 23 (Reuters) - Europe's biggest airline, Air France-KLM, hopes to reach breakeven point at the start of the fiscal year beginning next April, excluding the impact of fuel hedging contracts, its head told les Echos.
Hedging will continue to have a negative impact on the carrier next year, but cost-cutting measures announced already should stop cash flow deterioration next spring, Chief Executive Pierre-Henri Gourgeon told the newspaper in an interview.
Air France said on July 30 that fuel hedging had a negative impact of 252 million euros ($373 million) on its results in the first quarter ended June 30. [ID:nLU515218]
The group announced then a review of its medium-haul network, with changes to be implemented at the start of 2010, and said it expected its passenger business to stabilise in the second half of this fiscal year.
It added that it expected its cargo business to see a progressive stabilisation in the second half.
Gourgeon told Les Echos the airline planned to resume fuel hedging next month but covering only 80 percent of annual needs instead of up to 200 percent. It would also hedge 18 months ahead instead of four years, he added.
"In the end, we will be less well covered, but we won't risk losing as much money as today anymore," the CEO was quoted as saying. Gourgeon added that the airline would remain at current capacity levels next year and the year after, following a 5 percent reduction in its offering. Traffic was not expected to return to 2008 levels before 2012, he said. ($1=.6754 Euro) (Writing by James Regan; Editing by Hans Peters).
Hedging will continue to have a negative impact on the carrier next year, but cost-cutting measures announced already should stop cash flow deterioration next spring, Chief Executive Pierre-Henri Gourgeon told the newspaper in an interview.
Air France said on July 30 that fuel hedging had a negative impact of 252 million euros ($373 million) on its results in the first quarter ended June 30. [ID:nLU515218]
The group announced then a review of its medium-haul network, with changes to be implemented at the start of 2010, and said it expected its passenger business to stabilise in the second half of this fiscal year.
It added that it expected its cargo business to see a progressive stabilisation in the second half.
Gourgeon told Les Echos the airline planned to resume fuel hedging next month but covering only 80 percent of annual needs instead of up to 200 percent. It would also hedge 18 months ahead instead of four years, he added.
"In the end, we will be less well covered, but we won't risk losing as much money as today anymore," the CEO was quoted as saying. Gourgeon added that the airline would remain at current capacity levels next year and the year after, following a 5 percent reduction in its offering. Traffic was not expected to return to 2008 levels before 2012, he said. ($1=.6754 Euro) (Writing by James Regan; Editing by Hans Peters).