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UPDATE 2-Air France-KLM sees improved summer bookings
May 4, 2017 / 5:38 AM / 5 months ago

UPDATE 2-Air France-KLM sees improved summer bookings

* Q1 operating loss widens to 143 mln euros (poll: 145 mln loss)

* CFO says summer forward booking data promising

* CFO says doubts company will get involved with Alitalia

* Air France unit seeks pilot approval for low-cost airline (Adds comments on Boost, pilots’ vote)

By Cyril Altmeyer and Victoria Bryan

PARIS/BERLIN, May 4 (Reuters) - Air France-KLM said summer bookings were looking promising after making what it termed a resilient start to the year helped by recovering demand in Asia and South America.

After years of falling ticket prices, some major European carriers are seeing a slower decline in fares.

Air France-KLM said unit revenues - a measure of pricing - fell just 0.5 percent in the first quarter, compared with a drop of 5 percent for 2016 as a whole.

Lufthansa has also been more positive on pricing and last week said it was seeing a rebound in travel demand from north America and Asia.

Air France KLM Chief Financial Officer Frederic Gagey said forward booking data for long-haul routes for the summer months showed higher sales than at the same point last year.

“We’re not saying that everything is going well, but the trends that we saw have been confirmed or even improved compared with what we said earlier in the year,” Gagey told journalists.

He told analysts that Air France-KLM would not be chasing market share over the summer at the expense of pricing.

Like other legacy carriers, Air France-KLM has been embroiled in disputes with staff over cost cutting, notably at Air France.

On Wednesday, Air France put forward a draft plan for its new lower-cost airline, under the Boost project name, and on measures to improve competitiveness. It is open for signatures from staff until the end of the month.

In response, pilots unions criticised management for breaking off talks before a joint agreement could be reached. While the draft includes some concessions, such as on night shift bonuses, it does not meet their demands on pay.

Asked about the end to the talks, Gagey said: “Nobody got exactly what they were looking for.”

If approved, the Boost project should be set up by autumn.

A workers’ vote last week scuppered a rescue plan at rival Alitalia, throwing the airline’s future into doubt.

Gagey said he had “serious doubts” over whether Air France-KLM would become involved in efforts to rescue Alitalia, in which Air France-KLM once held a stake.

Overall, Air France-KLM reported a first-quarter operating loss of 143 million euros ($156 million) and revenue of 5.7 billion, in line with average analyst expectations.

The loss widened from 99 million euros a year earlier, while revenue edged up from 5.6 billion.

The group confirmed financial targets for 2017 and stuck to a target for a reduction in unit costs of at least 1.5 percent this year. Unit costs fell by 1.7 percent in the first quarter at constant exchange rates.

$1 = 0.9180 euros Reporting by Victoria Bryan and Cyril Altmeyer; editing by Sudip Kar-Gupta and Jason Neely

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