March 16, 2020 / 7:41 AM / 17 days ago

BRIEF-Air France-KLM Announces Exceptional Measures For Covid-19

March 16 (Reuters) - AIR FRANCE KLM SA:

* NOTING CONTINUATION OF COVID-19 CRISIS, AIR FRANCE-KLM TAKES EXCEPTIONAL MEASURES

* AIR FRANCE-KLM GROUP IS OBLIGED TO GRADUALLY REDUCE ITS FLIGHT ACTIVITY VERY SIGNIFICANTLY OVER NEXT FEW DAYS, WITH NUMBER OF AVAILABLE SEAT KILOMETERS (ASK) POTENTIALLY DECREASING BETWEEN -70% AND -90%

* AS RESULT OF THIS REDUCTION IN CAPACITY, AIR FRANCE WILL GROUND ITS ENTIRE AIRBUS 380 FLEET AND KLM ITS ENTIRE BOEING 747 FLEET

* THIS REDUCTION IN CAPACITY IS CURRENTLY SCHEDULED TO LAST TWO MONTHS, AND GROUP WILL CONTINUE TO MONITOR EVOLUTION OF SITUATION ON A DAILY BASIS AND ADJUST IT IF NECESSARY

* GROUP HAS ALREADY TAKEN A NUMBER OF STRONG MEASURES TO SECURE ITS CASH FLOW

* ADDITIONAL SAVINGS MEASURES HAVE BEEN IDENTIFIED, WHICH WILL GENERATE EUR 200 MLN IN 2020

* AS OF MARCH 12, GROUP AND ITS SUBSIDIARIES HAD MORE THAN EUR 6 BLN IN CASH AND CASH EQUIVALENTS

* ON CORONAVIRUS: INITIAL REVIEW OF INVESTMENT PLAN HAS REDUCED CAPITAL EXPENDITURE PLAN BY EUR 350 MILLION, TO WHICH WILL BE ADDED IMPACT OF DECLINE IN ACTIVITY ON AMOUNT OF MAINTENANCE INVESTMENTS

* AIR FRANCE AND KLM WILL BE CONSULTING WITH THEIR ELECTED EMPLOYEE REPRESENTATIVES ON MEASURES TO TAKE INTO ACCOUNT IMPACT OF EXPECTED DECLINE IN ACTIVITY, INCLUDING PROJECT TO IMPLEMENT PARTIAL ACTIVITY

* GROUP ESTIMATES THAT DROP IN REVENUES FROM PASSENGER BUSINESS RESULTING FROM REDUCTION IN CAPACITY WILL ONLY BE OFFSET BY AROUND 50% BY DROP IN VARIABLE COSTS BEFORE COST SAVINGS MEASURES Source text for Eikon: Further company coverage: (Gdansk Newsroom)

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