Air France KLM, RESULTS AS AT 30 JUNE 2019
Increased operating result and improved passenger unit revenu.

SECOND QUARTER 2019
? Passenger growth +5.1% and load factor +1.3 point.
? Passenger unit revenue up by 0.8%.
? Unit costs decrease by -2.3% at constant currency and fuel.
? Operating result at 400 million euros, up 54 millions euros compared to the second quarter 2018 hit by Air France strikes1, and reflecting unit cost improvement partly offset by an increased fuel bill.
? Further reduction in Group net debt, down 466 million euros to 5.7 billion euros and Net debt/EBITDA ratio at 1.4x, an improvement of -0.1pt compared to 31 December 2018.
OUTLOOK 2019
? Based on the current data for the Passenger network:
? Long-haul forward booking load factors from August to December are on average ahead compared to last year.
? Network passenger unit revenue at constant currency expected to be stable versus last year for the third quarter 2019.
? Full year guidance update:
? The Group will pursue initiatives to reduce unit costs, with a targeted 2019 reduction of between -1% and 0% at constant currency and fuel price.
? The 2019 fuel bill is expected to increase by 550 million euros compared to 2018 to 5.5 billion euros, based on the forward curve of 26 July 2019.
? Net debt/ EBITDA ratio below 1.5x.
Benjamin Smith, CEO of Air France-KLM Group, said: “In a challenging environment, Air France-KLM Group posted a robust second quarter. The slight increase in passenger unit revenue that we had anticipated, together with continued execution in unit cost reduction, enabled us to more than offset rising fuel costs. These elements, combined with satisfactory long-haul forward booking trends lead us to confirm our guidance for 2019. At the same time, we continue to implement our strategic vision focused on reducing costs and making our Group more robust in the very competitive marketplace in Europe. We have also made key decisions on the renewal of our fleet to transition to cleaner aircraft in order to support a more environmentally responsible operation, including the order of sixty Airbus A220s for short- and medium-haul and the accelerated phasing out of ten Airbus A380 to be replaced by more modern fuel efficient aircraft.”

Air France-KLM Group
Second Quarter First half 2019 Change 1) 2019 Change 1)
Passengers (thousands) 27,800 +5.1% 50,474 +4.2%
Passenger Unit revenue per ASK2 (€ cts) 6.75 +0.8% 6.48 -0.4%
Operating result (€m) 400 +54 97 -131
Net income – Group part (€m) 80 -30 -240 -81
Adj. operating free cash flow (€m) 110 +111 351 +210
Net debt at end of period (€m) 5,698 -466

1 The Air France strike had a -€260 million impact on the second quarter operating result and a -€335m impact on the half year operating result
2 Passenger unit revenue is the aggregate of Passenger network and Transavia unit revenues, change at constant currency.

Second quarter 2019 business review
Network: Solid revenue growth and increase in operating result
Network
Second Quarter
First Half 2019 Change Change constant currency 2019 Change Change constant currency
Capacity (ASK m) 75,680 +3.9% 145,440 +3.2%
Total revenues (€m) 6,016 +5.6% +3.9% 11,191 +3.8% +2.6%
Scheduled revenues (€m) 5,708 +5.8% +4.0% 10,601 +3.6% +2.3%
Operating result (€m) 291 +55 +77 12 -138 -68
Second quarter 2019 combined Passenger and Cargo revenues increased by 3.9% at constant currency to 6.0 billion euros, for capacity growth of 3.9%. The operating result amounted to 291 million euros, a 77 million euro increase at constant currency compared to last year, with the non-fuel unit cost improvement partly offset by a higher fuel bill.

Outlook
The global economic and geopolitical context remains uncertain and the Group operates in a highly competitive marketplace.
Based on the current data for the Passenger network:
? Long-haul forward booking load factors from August 2019 to December 2019 are on average ahead compared to last year.
? Network passenger unit revenue at constant currency is expected to be stable compared to last year for the third quarter 2019.
Capacity growth update:
? With the growth of Transavia France adjusted slightly downwards, Transavia is expected to grow at a sustainable pace of 7% to 9% for full year 2019.
? Passenger network plan remains unchanged to moderately grow capacity by 2% to 3% for the full year 2019 compared to last year.
Full year guidance update:
? The Group will pursue initiatives to reduce unit costs1, with a targeted 2019 reduction of between -1% to 0% at constant currency and fuel price.
? The 2019 fuel bill is expected to increase by 550 million euros compared to 2018 to 5.5 billion euros2, based on the forward curve of 26 July 2019.
? The Group plans capital expenditure of 3.2 billion euros for 2019 and is targeting a Net debt/EBITDA ratio of below 1.5x.
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see & read more on
https://www.airfranceklm.com/sites/default/files/q2_2019_press_release_en_vdef.pdf

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