Air France-KLM will ask for up to 4 billion euros to repay state aid, shares sink

Passengers wait at the Air France counter at Nice International Airport, France, February 20, 2020. REUTERS/Eric Gaillard/File Photo

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PARIS, Feb 17 (Reuters) – Air France-KLM (AIRF.PA) plans to raise up to 4 billion euros ($4.6 billion) as it seeks to repay state donations in pandemic, the airline said Thursday, eclipsing its strong profits in the event of a recovery. in air transport and causing its shares to fall by more than 4%.

The airline – which received in 2020 10.4 billion euros in loans guaranteed by France and the Netherlands, its two main shareholders – confirmed the need for a call for funds which it had considered in October at the time of its third quarter results.

However, he gave no details on the terms and timing of a possible fundraiser. “Air France-KLM intends to remain flexible on transaction structures, as well as on the sequencing and sizing of each instrument according to market conditions,” he said.

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The money to be raised compares to the group’s current market value of just under €3 billion. Its shares, which hit a three-month intraday high on Wednesday, fell about 4.5% to 4.267 euros at 09:26 GMT.

Fourth-quarter performance was helped by a resumption of transatlantic travel, as the United States reopened to vaccinated travelers in November.

The group added that it had started to see a recovery in bookings this quarter as Omicron’s restrictions began to ease. Read more

Core profit or EBITDA for the fourth quarter reached 827 million euros, compared to a figure of 796 million in the third quarter and the second consecutive quarter of profitability at this level since the outbreak of the pandemic.

INCREASED CAPACITY

For the year, EBITDA reached 745 million euros, beating analysts’ forecasts and the company’s own forecasts by a “slightly” positive figure. Read more

Steven Zaat, chief financial officer, said the airline increased capacity on long-haul flights in the fourth quarter despite a resurgence in coronavirus cases due to the Omicron variant, which has hurt short and medium-haul travel in Europe. .

For the first quarter of this year, the company expects EBITDA to break even, while available seat kilometers for the group’s network passenger business are estimated at 73% to 78% of 2019 levels, with the quarter being impacted by the Omicron variant and a slowdown in business travel as companies still primarily operate a work-from-home model.

“We don’t believe the competition will stay on their hands, so high returns may not be achieved, especially as business travel continues to suffer,” Mulder added, referring to the ambition. group to reach 2019 capacity levels by 2024 and an “ambitious” outlook. on margins and debt.

Since last week, however, Zaat said bookings have started to catch up, including for the summer period.

The company recorded a better than expected net loss of 3.29 billion euros. Revenue of 14.32 billion beat the average Refinitiv poll estimate of 13.97 billion.

($1 = 0.8784 euros)

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Reporting by Piotr Lipinski; Editing by Sherry Jacob-Phillips and David Holmes

Our standards: The Thomson Reuters Trust Principles.

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