Air France-KLM set to accelerate and expand its restructuring plans

The group reiterated plans to improve unit costs by 1-1.3 per cent or 250-300 million euros over the year as a whole, based on measures already announced.

The news comes as the company reported lower second-quarter operating profit and slipped further in to the red with a net quarterly loss of 79 million euros.

The airline said the lack of results improvement leads it to implement immediate additional adaptation measures including, in particular, the closure of heavily loss-making routes, the downward revision in capacity for the forthcoming Winter season, together with an acceleration and an increase in the magnitude of its cost-saving initiatives. KLM pilots are also considering a two-year rise in their retirement age.

De Juniac said he’ll trim second-half capacity to meet lower demand, with cuts of 14 percent to Japan – where recent terror attacks in France have deterred visitors – 5 percent to Brazil and 6 percent to East Africa.

The company posted second-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) of 569 million euros.

Second-quarter revenue rose 3% to €6.64 billion, Air France-KLM discloses in its financial statement for the six months to 30 June. Despite a five-percent increase in passenger revenue for the first half of 2015, income from cargo plummeted 81 percent, the company said.

It still plans to reduce its net debt to 4.4 billion euros by end-2015.

Air France KLM sees a significant reduction in net debt, from 5.4 billion euros at the end of 2014 to around 4.4 billion euros at the end of 2015.

Air France planes are parked at the Charles de Gaulle worldwide Airport during a pilots strike September 22, 2014.

In its outlook, it says it expects savings on fuel expenditure to be offset by unit revenue pressures and the negative effects of currency exchange, in a repeat of what happened in the first half.

Echoing concerns by U.S. airlines about competition from the Gulf, Air France-KLM meanwhile called on the European Commission to negotiate a “balanced” agreement with Gulf states whose airlines have drawn traffic from Western rivals. “We are not having any discussions with other parties”, he said.