AFKL big drop in 2018 operating results.

Old Feb 20, 19, 7:58 am
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AFKL big drop in 2018 operating results.

AFKL published its financial results for 2018.
As usual, the good points are emphasized in the presentation and the stock price went up as results are better than expected.

But the operating results dropped from 1.9billion to 1.3b with a severe drop in operating margin.
Strikes at AF clearly had a serious impact but even KLM had a tiny drop in operating profits. It is striking to see the 1,073m profit at KL compared to 266 at AF..

The AFKL 2018 net income is 409m, better than the 163 m in 2017. But that is mostly explained by one-off exceptional items.
As stated in the presentation, "Excluding these one-offs, the change of Net income - group part FY2018 is -€796 million compared to last year". That is not a brilliant result.
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Old Feb 20, 19, 9:16 am
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Originally Posted by brunos View Post
It is striking to see the 1,073m profit at KL compared to 266 at AF.
Is it, though?

Seasoned AFKL watchers should, by now, have grown accustomed to KL's outsized contribution to the group's results.
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Old Feb 20, 19, 1:40 pm
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Originally Posted by brunos View Post
Strikes at AF clearly had a serious impact
For sure. But not only. I believe the catastrophic summer, operation-wise, had also a big impact for AF. I am referring to the CDG baggage chaos and a large number of flights cancelled or heavily delayed. Those have led, for sure, to a huge amount of money for compensations, hotel nights, meals, reimbursement of pax purchases for clothes, etc.
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Old Feb 21, 19, 1:24 am
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Originally Posted by Goldorak View Post
For sure. But not only. I believe the catastrophic summer, operation-wise, had also a big impact for AF. I am referring to the CDG baggage chaos and a large number of flights cancelled or heavily delayed. Those have led, for sure, to a huge amount of money for compensations, hotel nights, meals, reimbursement of pax purchases for clothes, etc.
Indeed. I wonder what was the indirect impact of those AF problems on KL traffic.
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Old Feb 21, 19, 1:42 am
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Originally Posted by Goldorak View Post
For sure. But not only. I believe the catastrophic summer, operation-wise, had also a big impact for AF. I am referring to the CDG baggage chaos and a large number of flights cancelled or heavily delayed. Those have led, for sure, to a huge amount of money for compensations, hotel nights, meals, reimbursement of pax purchases for clothes, etc.
And it lead to regulars turning their back on AF (Me for example).

Last edited by Zembla; Feb 21, 19 at 8:59 am
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Old Feb 21, 19, 2:15 am
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I cannot take AF seriously anymore as an airline, and I think that reputation has solidified in many of even a casual traveler's minds. I'm pretty sour about KL being stuck in that mess, and the new management seeing it as the primary 'premium' brand. Visionary leadership would acknowledge this, rather than attempt to bring KL into a fold with AF to drag it down along with it. Time for a rebranding of AF.
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Old Feb 21, 19, 7:38 am
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Originally Posted by caliform View Post
I cannot take AF seriously anymore as an airline, and I think that reputation has solidified in many of even a casual traveler's minds. I'm pretty sour about KL being stuck in that mess, and the new management seeing it as the primary 'premium' brand. Visionary leadership would acknowledge this, rather than attempt to bring KL into a fold with AF to drag it down along with it. Time for a rebranding of AF.
Rebranding of AF?
AF has many many things to improve, but its brand is surely not one
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Old Feb 21, 19, 9:39 pm
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Originally Posted by Satie View Post
Rebranding of AF?
AF has many many things to improve, but its brand is surely not one
I don't agree with you.
Brand is a complex concept.
I understand that AF likes to view itself as a premium brand, but that is not the perception in Asia and probably in other overseas markets.
Half the business seats are still antique non-flat.
AF has made huge progress in its F product, primarily on the ground at CDG, but more than half the seats (A380) are still of a very old generation.
And brand is more than hard/soft product in the air. All the various industrial actions in the past few years have given the image of an unreliable airline.

Ben Smith is fully aware that AF is lagging and that its only hope, given the high cost structure, is to build on the premium brand. But AF is far from it and it will take years to achieve.
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Old Feb 22, 19, 5:13 am
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Originally Posted by brunos View Post
I don't agree with you.
Brand is a complex concept.
I understand that AF likes to view itself as a premium brand, but that is not the perception in Asia and probably in other overseas markets.
Half the business seats are still antique non-flat.
AF has made huge progress in its F product, primarily on the ground at CDG, but more than half the seats (A380) are still of a very old generation.
And brand is more than hard/soft product in the air. All the various industrial actions in the past few years have given the image of an unreliable airline.

Ben Smith is fully aware that AF is lagging and that its only hope, given the high cost structure, is to build on the premium brand. But AF is far from it and it will take years to achieve.
I fully agree with most of these things. There are many things I dislike about AF and I donít view it is a premium airline, but overall it is a descent airline (for a european major).

I just think that nowadays, rebranding is happening way too often for way too many companies. You donít have to change a brand (Iím only talking about the brand, not about product or service) to change its perception. If AF gets a more consistent hard product, a more upmarket soft product, better lounges, better operational efficiency, less strikes (one can hope) etc....the same AF brand would be perceived very differently.
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Old Feb 22, 19, 5:17 am
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Originally Posted by Satie View Post


I fully agree with most of these things. There are many things I dislike about AF and I donít view it is a premium airline, but overall it is a descent airline (for a european major).

I just think that nowadays, rebranding is happening way too often for way too many companies. You donít have to change a brand (Iím only talking about the brand, not about product or service) to change its perception. If AF gets a more consistent hard product, a more upmarket soft product, better lounges, better operational efficiency, less strikes (one can hope) etc....the same AF brand would be perceived very differently.
It seems we are in full agreement.
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Old Feb 23, 19, 12:44 pm
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Originally Posted by Satie View Post


I fully agree with most of these things. There are many things I dislike about AF and I donít view it is a premium airline, but overall it is a descent airline (for a european major).

I just think that nowadays, rebranding is happening way too often for way too many companies. You donít have to change a brand (Iím only talking about the brand, not about product or service) to change its perception. If AF gets a more consistent hard product, a more upmarket soft product, better lounges, better operational efficiency, less strikes (one can hope) etc....the same AF brand would be perceived very differently.
I agree with you. AF is currently lacking consistency, vision and coherence. This is instead something that KL has and that's why -within Skyteam- most of the flights I'm taking -after the ones on AZ (my home carrier)- are on KL and very few with AF. I guess the size and company culture help a lot KL on all this.
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Old Feb 23, 19, 1:12 pm
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Originally Posted by brunos View Post
AFKL published its financial results for 2018.
As usual, the good points are emphasized in the presentation and the stock price went up as results are better than expected.
​​​​​Actually they missed the estimates but 2018 was a record year for AF in terms of revenue. I guess investors are putting a lot of faith in the ability of the new CEO to improve AF huge cost structure.
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Old Feb 27, 19, 9:45 am
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Is union power preventing AF from pulling their socks up?
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Old Mar 1, 19, 1:25 am
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Originally Posted by HIDDY View Post
Is union power preventing AF from pulling their socks up?
Given that the union's power has allowed them to ensure that management's boot is always on the wrong foot, the airline has never been able to pull itself up by the bootstraps, let alone socks.

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