Air France KLM Romania: 30% decline in revenues year-to-date

Air France KLM Airline reported a 30% year-on-year decline in revenues during January-September 2009 for its operations in Romania.
The Jan-Sep results were largely weighed down by the 60% decline in ticket prices, due to the global economic crisis.

“The number of passengers carried in the first nine months to and from Romania increased by 3%, but the 30-60% cut in fares has reflected over the 30% decrease in revenues”, said Alexandru Dobrescu (photo), Ai France KLM’s country manager for Romania.

The reduction in fares was aimed at keeping its market share in Romania, the airline’s most important objective for this year. “Amid a global economic crisis, profit is not the most relevant indicator, but market share, and we plan on maintaining it at the same level as last year, namely 18%”, said the head of Air France KLM.

Air France KLM has made considerable efforts to keep its Business Class passenger number, as the segment was the most affected by clients’ travel cost-cutting measures. “The number of passengers still travelling on Business Class to and from Romania has remained constant, but ticket price fell by at least €100”, Air France KLM’s head said.

Air France KLM and Tarom are jointly operating five daily flights from Bucharest to Paris, and four daily flights from Bucharest to Amsterdam. “In order to keep load factor in a certain range, we will remove one flight from Bucharest to Amsterdam in our winter timetable, while keeping Bucharest-Paris flight frequency unchanged”, Dobrescu added.

According to his estimates, the airline industry will remain under financial crisis’ pressures, estimating stabilization for the coming period, but recovery is not yet in sight.

“It would be too soon for companies to try getting into their old travel spending habits, as they would remain committed to their cost-cutting strategies next year too”, said Dobrescu.

Air France KLM reported in September a 5.3% decline in the number of passengers carried compared to the same period of last year, down to 6.23 million passengers.

Recently, the airline has put in place a voluntary leave program for 1,500 employees, as the global economic crisis has severely affected the company’s activity.

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