Air France-KLM ‘must expand’

Air France-KLM is no longer at risk financially but the Franco-Dutch carrier needs to become one of the world’s airline giants again to avoid decline, outgoing chief executive Alexandre de Juniac has told RTL radio.

De Juniac, who announced his surprise departure to lead the International Air Transport Association late on Tuesday, said he had achieved his goals of ending losses and reducing debt at the carrier, despite having three years left of his mandate.

“We have made enormous progress at Air France-KLM with the group’s 100,000 staff,” he told RTL on Wednesday.

“When I arrived there were significant losses, the company was being suffocated by its debt, and we had lost our way in terms of products, we were going backwards.

“We put the company back in the black, we paid down its debt, and I think we have a product line … that is one of the best in the world.”

Air France-KLM is emerging from four years of restructuring amid tough competition from low-cost carriers and Gulf rivals, and de Juniac won a fresh four-year mandate from the airline’s shareholders last May.

The carrier returned to profit last year with an operating result of 816 million euros ($927 million) and net income of 118 million, helped by passenger growth and a lower fuel bill. Net debt fell to 4.3 billion euros as of Dec. 31 from 5.4 billion a year earlier.

De Juniac told RTL there was still “an enormous amount” to do for the future of the airline.

“Air France is out of the danger zone … but it has not returned to the group of the top three or four best in the world, and that’s what’s needed for Air France,” he said.

“In a race that is led by giants, if you’re not among these giants, you decline.”

Asked if he had any advice for his successor, who has yet to be appointed, he said: “Take the company forward, develop it, it’s ready.”