Air France-KLM lost 1.8 billion euros ($1.9 billion) in the first three months this year as flight sanctions grounded planes around the world, and disclosed on Thursday it would take several years to recover.
Partner airlines, which have already been granted billions of euros in emergency assistance from the French and Dutch governments, expect that the second quarter will be even worse, with traffic dropping by 95 percent.
Air France-KLM expected a sluggish resumption of operations over the summer, but forecast that in the third quarter it will still fall by 80 percent compared to previous years.
In March there was a rapid decrease in sales which will naturally continue through the second quarter, cautioned Chief Financial Officer Frederic Gagey.
A big number of airline companies have been seeking support from government as they try to cut costs and save cash as a response to the ongoing global crisis.
Air France-KLM plans to reduce monthly cash burns in the second quarter to 400 million euros, thanks to cost-cutting and state-funded furloughs that save 350 million euros a month.
Like other carriers, Air France currently operates a skeletal force to keep critical air connections and for the second quarter provides only 5 percent of the previously scheduled capacity. Its budget Transavia subsidiary ceased all operations due to the crisis.
For 2021, Air France-KLM says it aims to reduce its fleet's structural capacity by at least 20 percent versus 2019, as the airline expects flight demand not to rebound to pre-pandemic rates for several years. The delivery of three Airbus A350s set for joining this year's Air France fleet has been canceled to next year.
In January and February, Air France-KLM reported a sales increase, but then a major drop in March as countries shut down borders and isolated most of the world's population.
Over the quarter, the airline registered sales of 5 billion euros, down 15 percent from last year. Net income fell 1.8 billion euros compared to a loss of 324 million euros in the first three months of 2019.
In hopes of persuading citizens to continue traveling once flight restrictions are lifted, Air France-KLM is working to ensure virus protection in its all its fleet of aircraft.
The company now forecasts a full-year deficit in operating earnings prior to interest, tax, depreciation and amortization, the first in the company's history, Gagey said.
Air France-KLM disclosed that it is currently setting in motion a new transformation strategy to ensure financial sustainability over the medium and long term.
