Air France-KLM has pushed back its forecast for a full recovery to 2024 and will intensify its restructuring plans, including “significant” job losses, it said as it unveiled a EUR2.6 billion euro (USD3.1 billion) net second-quarter loss and EUR1.55 billion (USD1.82 billion) quarterly operating loss.

The group's half-year net loss stands at EUR4.4 billion (USD5.2 billion), its operating loss EUR2.4 billion (USD2.8 billion).

It expects group capacity in 2021 to be at least 20% below 2019 levels, it outlined in a statement accompanying the results, while predicting that capacity between July and September 2020 will be about 45% of 2019, rising to 65% in the fourth quarter.

“The group and its airlines must significantly reduce the number of employees,” it warned. “There is limited visibility on the demand recovery curve as customer booking behaviour is much more short term than before the covid-19 crisis.”

Air France-KLM has EUR14.2 billion (USD16.7 billion) of “liquidity or credit lines at its disposal to weather the crisis and restructure its business” following substantial support from the French and Dutch governments.

But Air France (AF, Paris CDG) aims to cut 16% of jobs (around 6,560 full-time employees) by the end of 2022, plus 42% of the jobs (another 1,000 or so) at regional subsidiary HOP! (A5, Paris Orly).

Job losses at KLM Royal Dutch Airlines (KL, Amsterdam Schiphol) remain subject to negotiation with unions but will be “significant”, the Dutch carrier said in its own statement. It is due to announce details of restructuring in October, but “of the current total of 33,000 FTEs [full-time equivalent] in the entire KLM Group, the workforce must be reduced by 4,500 to 5,000 FTEs, to 28,000 FTEs, in the course of 2021.

KLM described its result as the “worst financial setback” in its history. It reported a EUR768 million (USD904 million) loss for the first half of the year, compared to a EUR1.6 billion (USD1.9 billion) loss at Air France.

Air France-KLM also said in its results that it is seeking hybrid bond refinancing. A five-year EUR400 million (USD471 million) unsecured bond, priced at 6.25%, is due to mature in 2020.

Among the “foreseen incidental elements with cash impact” in the second half of 2020, which also include cash refunds of prepaid ticket revenues estimated at EUR1.6 billion (USD1.9 billion) and repayment of KLM revolving credit facilities of EUR700 million (USD825 million), is the hybrid bond, which is intended to be repaid in full but for which the group is “considering refinancing options.”