Air France-KLM to defer 10-12 aircraft

Air France-KLM will delay the arrival of up to 12 aircraft, as it seeks to slash €600 million ($683 million) from its capital expenditure plan for the next two years.
                                                                       
Speaking at the release of Air France-KLM’s 2014 results, Air France-KLM CFO Pierre-Francois Riolacci said, “10 to 12 aircraft will be delayed, including long-haul and short-haul” over the next two or three years. Deliveries to both Air France and Transavia will be affected, but Riolacci declined to give specific numbers or aircraft types.

Likewise, Air France has no immediate plans to grow its A380 fleet beyond the 10 aircraft it has in operation, despite two of its 12 aircraft remaining undelivered. Air France-KLM chairman and CEO Alexandre de Juniac said delivery dates for the final two aircraft are “not decided.”

De Juniac also confirmed that Air France Regional arm HOP! will be taking ATR 72-600s, as already revealed by ATW. “The decision has been made to buy ATR 72-600s. The date for the official order signing will be coming very soon. It is urgent to replace the old ATRs,” he said.

The renewal of KLM Cityhopper’s Fokker 70s, along with some aircraft within Air France’s HOP! fleet are also under discussion. KLM president and CEO Pieter Elbers confirmed his carrier will receive its first Boeing 787-9 in October. From 2016-17 onward, KLM will also start looking to replace its Boeing 747s.

Air France-KLM originally detailed plans to spend €1.9 billion on capital expenditure in 2015 and €2.2 billion in 2016 at the release of its Perform 2020 plan last September. De Juniac said this was “ambitious” and would have marked a record-high investment for the group. However, he explained that the tough economic environment, unit revenue pressures, fuel price and exchange rate uncertainty and patchy worldwide growth triggered the budget to be cut by €600 million.

“The unit revenue is down, so we have had to be less ambitious in our aircraft purchases, however we fully maintain our ramp up of the product at both airlines,” De Juniac said. “Even if we have had to slow down the renewal of the fleet, it is continuing.”

Air France-KLM will continue to invest in the revamp of its customer-facing and onboard product, despite the financials pressures weighting on the group. More than a third of its long-haul fleet will be equipped with new interiors by the end of 2015.

(Victoria Moores - ATWOnline News)