13 JANUARY 2012

AIR FRANCE-KLM announced a three-year cost-cutting plan spread on the 2012-2014 period and has opted for « quasi stable capacity » or a projected increase « by a little over 5%«  in each passenger and cargo traffic, taking into account the Group‘s « growth prospect«  impacted by an uncertain economic context according to the Group‘s communication.

As a key priority, net debt will be reduced by € 2 billion to about € 4.5 billion by end December 2014 and in the 2012-2014 period, €2 billion in net cash flow « will be generated through a combination of immediate actions and a transformation plan«.

Cost reduction measures include a €1 billion cut, a freeze on general pay rises in 2012 and 2013 at Air France, and « wage moderation at KLM ». The 2011 hiring freeze policy implemented last September will be carried on.

Structural measures involving the medium-haul business so as to « break even within three years » aim at improving productivity and assets-fleet utilization, the redefinition of certain activities and the potential use of « more extensive outsourcing » in some areas. The Group has also adjusted its medium-term fleet plan through the deferral of aircraft deliveries and the non-exercise of options. Investments will reduced by over € 6 billion for the 2009-2011 period to below € 5 billion for the next three years.