Massive losses announced this week by Air France KLM, but also prospects for a way out of the crisis. (AARONP / BAUER-GRIFFIN / GC IMAGES)

As was to be expected, Air France-KLM’s losses for 2020 are abysmal. More than 7 billion euros, a turnover in free fall of nearly 60% and a net debt which has doubled in one year to now reach 11 billion euros. “These are orders of magnitude that make you dizzy” admitted Frédéric Gagey, Chief Financial Officer of Air France KLM, during the presentation of the group’s results this week.

Its turnover increased, as a result of higher prices caused by a worldwide reduction in supply. Another positive point, the group currently has almost 10 billion in liquidity and lines of credit, thanks to significant state aid in the form of guaranteed loans from the French and Dutch governments. State loans and liquidity which, according to Frédéric Gagey will allow Air France KLM to see the year ahead with peace of mind, even if the visibility of the recovery in demand is still limited, perhaps in the second or third trimester through vaccine development. These losses are abysmal but totally consistent with those of the entire aviation sector, which saw 66% of its passenger traffic evaporate in 2020, and whose losses exceeded 118 billion euros last year.

Suddenly, some see it as a paradox, others an injustice. For Air France-KLM and all the traditional airlines, structurally in debt long before the pandemic, but which will have been able to survive thanks to state aid, this health crisis may ultimately be beneficial. Pressed by the praetor states, but without any real concern as to their sustainability, these “Legacy”, flagship companies, will accelerate their transformation, their reforms, considerably reduce their unit costs while waiting for better days.

They could relaunch in healthy markets with less competition, where ultimately, the companies that could disappear, would not necessarily be those that were losing money before the Covid, but those that did not have the critical size or the cash flow. necessary to hold out in the face of a crisis whose outcome is still unknown. So the risk is that the world after looks like a world before. A world before competition, before the liberalization of the sky, of the open sky, a world of virtual monopoly, where air passengers undoubtedly have a lot to lose, in terms of fare offers …

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