Air France-KLM financial situation worrying

Air France-KLM recently indicated that its financial situation is extremely worrying after it reported great losses in its 2011 operational results. The airline has incurred a significant operating loss for the fourth consecutive year.

Chief Executive of Air France Alexandre de Juniac said that Air France flight reservations had been severely impacted and the company suffered huge losses due to growing fuel costs and stiff competition from low-cost carriers. The lingering effects of the financial crisis could see losses from operations last year reach “several hundred million euros”, revealed Mr. de Juniac to a French parliamentary commission.

Air France-KLM’s net debt has widened by $2.61 billion to $8.62 last year.

The company has already activated its recovery plan, and aims to improve productivity, cut or postpone investments and reduce overheads.