Air France-KLM sales are showing little sign so far of the travel recovery it still hopes to see by summer, the airline group said, as it posted a wider first-quarter operating loss.
The group also confirmed its intention to raise more capital within months - a prospect that has weighed on its shares.
Air France-KLM said it expects to operate 50% of its pre-pandemic flight capacity in the second quarter under way, picking up to 55% to 65% in July-September.
"We're waiting to see the first effects of vaccination," Chief Financial Officer Frederic Gagey said. Demand is showing "no noticeable improvement so far", he added, with customers often waiting to book at the last minute.
While rebounding US and Chinese domestic markets are already benefiting airlines there, carriers in Europe are stuck waiting for slower vaccine rollouts to give way to looser curbs and an anticipated recovery.
Lufthansa cut its 2021 capacity forecast last week while narrowing its first-quarter loss with a 19% workforce reduction. Aer Lingus and British Airways parent posts quarterly earnings tomorrow.
The operating loss increased to €1.18 billion from €815m in the first quarter of 2020, which was only partially affected by the pandemic. Revenue fell 57% to €2.16 billion.
"The Q1 results showed the impact of depressed demand in the face of ongoing lockdowns and travel restrictions," Liberum analyst Gerald Khoo said.
The group, which took a €10.4 billion government-backed bailout last year, raised €1 billion in an April share issue that saw the French state double its holding to 28.6%.
It also converted a €3 billion French government loan into hybrid capital and is seeking European Union approval for a conversion of €1 billion in Dutch support.
Dutch arm KLM said today it would not need further cash injections.
Air France-KLM nonetheless plans to raise further capital in a process its CFO said would see debt and state support "gradually transformed into market-credible products".
Until then, investor focus "will remain on its balance sheet, with today's update confirming (that) additional costly financing and/or a further dilution for existing shareholders is imminent," Goodbody analyst Mark Simpson said.
The airline group's net loss narrowed to €1.48 billion from €1.8 billion a year earlier, which included a large fuel-hedging deficit as traffic collapsed.
Net debt rose by €1.5 billion over the quarter to €12.5 billion at March 31, when liquidity and available credit stood at €8.5 billion.
Gagey, 64, is due to retire at the end of June and will be replaced in the group role by current Air France finance chief Steven Zaat, the company said today.
