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Wednesday 19 May, 2010

KLM

Air France-KLM year results 2009-2010






FINANCIAL YEAR 2009-10

FOURTH QUARTER

  * Stronger demand and improvement in unit revenues at the end of the quarter
  * Better than expected operating result, despite negative impact of 173
    million euros from fuel hedging and the effects of adverse weather
    conditions and the air traffic control strike in February
  * Positive operating cash flow and stabilization of debt level



FULL YEAR RESULTS REFLECT IMPACT OF GLOBAL ECONOMIC CRISIS

  * 15% drop in revenues
  * Negative impact of 637 million euros due to fuel hedges
  * Operating loss of 1.28 billion euros



Outlook  for FY 2010-11: Objective of  operating break-even maintained excluding
impact  of  pre-2009  fuel  hedges  and  subject  to definitive cost of European
airspace closure





The  board  of  directors  of  Air  France-KLM,  chaired by Jean-Cyril Spinetta,
convened on 19(th) May 2010 to approve the accounts for Financial Year 2009-10.

Pierre-Henri  Gourgeon, Chief  Executive Officer,  made the  following comments:
"2009-10 will go on record as our 'annus horribilis'. The global economic crisis
had  a  profound  effect  on  the  entire  airline  industry.  In  addition, Air
France-KLM  had to contend  with the tragedy  of the Rio-Paris  accident of June
1(st) 2009. During  these demanding times,  the strengths of  the Air France-KLM
combination  have come  into their  own, and  its efficiencies  have proven even
greater  than expected.  As a  result, we  have been  able, together  with Peter
Hartman,  to rapidly  implement drastic  changes within  the group.   The entire
workforces  of Air France and KLM have  been mobilized under the motto 'keep the
family  together',  and  have  delivered  an outstanding performance. With their
support,  we  have  launched  a  robust  action  plan,  based  on three pillars:
controlling  capacity and investments, adapting our business models in passenger
and  cargo, and strengthening our alliance  and partnerships. These actions have
started  to bear fruit and will enable us to emerge from the crisis with a young
fleet, a rejuvenated product offer, adapted to the needs of our customers, and a
preserved  financial  position.  We  are  therefore maintaining our objective of
operating  break-even for  the current  financial year  excluding the  impact of
pre-2009  fuel hedges,  and subject  to the  definitive cost  of the  closure of
European airspace."

In  this difficult context,  the board of  directors decided not  to propose the
payment of a dividend in respect of Financial Year 2009-10.

Key data

+-----------------------------+-----------------------+------------------------+
|                             |                       |  Full Year to 31(st)   |
|                             |Quarter to 31(st) March|         March          |
|€ millions (per share data in+-------+-------+-------+--------+-------+-------+
|€)                           | 2010  | 2009* |change |  2010  |2009** |change |
+-----------------------------+-------+-------+-------+--------+-------+-------+
|Revenues                     | 5,021 | 5,060 |(0.8)% | 20,994 |24,693 |(15.0)%|
+-----------------------------+-------+-------+-------+--------+-------+-------+
|EBITDAR***                   |   77  |  62   | 24.2% | 1,111  | 2,275 |(51.2)%|
+-----------------------------+-------+-------+-------+--------+-------+-------+
|Operating income/(loss)      | (497) | (535) | 7.1%  | (1,285)| (186) |  nm   |
+-----------------------------+-------+-------+-------+--------+-------+-------+
|Adjusted operating           |       |       |       |        |       |       |
|income/(loss)****            | (435) | (474) | 8.2%  | (1,040)|  45   |  nm   |
+-----------------------------+-------+-------+-------+--------+-------+-------+
|Net income/(loss), group     |       |       |       |        |       |       |
|share                        | (691) | (479) |(44.3)%|(1,559) | (811) |(91.5)%|
+-----------------------------+-------+-------+-------+--------+-------+-------+
|Earnings/(loss) per share    |(2.35) | (1.62)|  nm   | (5.30) |(2.75) |  nm   |
+-----------------------------+-------+-------+-------+--------+-------+-------+
|Diluted earnings/(loss) per  |       |       |       |        |       |       |
|share                        |(2.35) | (1.62)|  nm   | (5.30) | (2.75)|  nm   |
+-----------------------------+-------+-------+-------+--------+-------+-------+
*Restated for the application of IFRIC 13 and pro forma Martinair.
Reconciliation table available in results presentation.
**Pro forma Martinair. Reconciliation table available in results presentation
***EBITDAR: operating income / (loss) before amortization, provisions and
operating leases.
****Adjusted for the portion of operating leases corresponding to financial
costs (34%).

Fourth Quarter

Progressive recovery in demand

Group  revenues stood at 5.02 billion euros (-0.8%). Passenger demand picked up,
especially  at the end of the quarter. A 0.9% increase in traffic, combined with
a  3.4% reduction in  capacity led  to a  3.3 point rise  in the  load factor to
78.8%.  Revenue  trends were also  positive with an  improvement in both premium
and  economy. In total, unit revenue per  available seat kilometer (RASK) was up
2.7%, and  by  3.5% on  a  constant  currency basis. Passenger revenues declined
slightly  to 3.88 billion  euros (-1.3%).  The operating  loss of  the passenger
business  stood at 381 million euros (-239 million euros excluding the impact of
pre-2009 fuel hedges).

The  restructuring  of  the  cargo  business,  launched in the previous quarter,
started to bear fruit, and coincided with an upturn in activity. As a result the
load  factor  gained  8.9 points  to  69.2% on  the  back of traffic up 0.7% and
capacity  down by 12.2%.  Unit  revenue per available  ton kilometer (RATK) rose
strongly  (+28.9% and +30.9%  on a constant  currency basis). Revenues therefore
progressed  by 12.3% to  674 million euros.  Despite rigorous  cost control, the
business remained in the red (-63 million euros) but showed a marked improvement
on  the previous year  (-164 million euros  at 31(st) March 2009). Excluding the
impact  of pre-2009 fuel hedges, the operating  loss of the cargo business would
have stood at 39 million euros.

Operating costs contained

Although  production  measured  in  equivalent  available seat kilometers (EASK)
declined  by  5.1%, unit  costs  per  EASK  rose  by 4.9%, but by only 1.0% on a
constant  currency and  fuel price  basis.  Operating  costs fell  1.4% to 5.52
billion  euros. Excluding fuel,  they declined by  4.1%. The group realized 190
million euros in savings in the context of the 'Challenge 12' plan.

For the first time since the beginning of the financial year, the fuel bill rose
(+9.3%) to 1.24 billion euros under the combined effects of a reduction in
volumes of 6%, a favorable currency impact of 5%, a rise in the jet fuel price
of 31% and a negative impact from fuel hedges of 173 million euros.

Other costs also contributed to the overall cost performance:

  * Employee costs rose slightly to 1.84 billion euros (+1.3%). Excluding the
    additional contributions to the Air France and KLM pension funds, they would
    have declined by 0.8%.
  * Marketing and other costs fell by 1.0% and 16.0% respectively.



The  group recorded an  operating loss of  497 million euros against 535 million
euros  a  year  earlier.  Excluding  the  negative  impact  of  fuel hedges, the
operating  loss would have been 324 million euros. Elsewhere, the group booked a
152 million  euro exceptional provision for restructuring charges mainly related
to the voluntary departure plan at Air France.

Net  interest charges rose from 47 million euros to 91 million euros on the back
of  a rise in  the cost of  debt (+30 million  euros) and a  decline in interest
income  (-14  million  euros).  Other  financial  income  and costs stood at -94
million euros (-96 million euros at 31(st) March 2009) of which 88 million euros
related to a negative exchange result.

The  pre-tax loss stood  at 943 million euros,  while the net  loss, group share
amounted  to 691 million  euros. The  net loss  restated* for  non-recurring and
non-cash  items related to the hedging instruments amounted to 477 million euros
(-610 million euros at 31(st) March 2009).

Both  the loss per share and fully diluted loss per share amounted to 2.35 euros
(-1.62 euros at 31(st) March 2009).

During  the quarter,  the group  generated positive  operating cash  flow of 70
million  euros and  slightly positive  free cash  flow, while  net debt remained
virtually stable.

*  As defined in  the 2008-09 Reference Document  p 117 and p.  6 of the update;
reconciliation table available in results presentation

Full Year 2009-10

Passenger  traffic  declined  by  3.2%, less  than  the reduction in capacity of
4.3%, leading  to a 1 point rise  in load factor to  the high level of 80.7%. In
cargo,  the decline in traffic (-13.7%) was also below the reduction in capacity
(-16.5%),  enabling  the  load  factor  to  gain  2.2 points  to  66.5%. In both
activities, unit revenues were sharply down relative to the previous year. Total
revenues therefore fell by 15.0% to 20.99 billion euros. For production measured
in  EASK  down  6.7%, unit  costs  per  EASK  fell 4.4%. Savings realized in the
context of the 'Challenge 12' plan amounted to 718 million euros.

The  operating loss stood at 1.28 billion euros  after a negative impact of 637
million  euros linked to  the pre-2009 fuel  hedges. The adjusted operating loss
stood at 1.04 billion euros.

The  net loss, group  share stood at  1.56 billion euros (-811  million euros at
31(st) March 2009).  The net loss restated* for non-recurring and non-cash items
related  to the hedging instruments amounted to 1.23 billion euros (-578 million
euros at 31(st) March 2009).

The  net loss per share and fully diluted net loss per share both stood at 5.30
euros, against a loss of 2.75 euros at 31(st) March 2009.

Financial position maintained

Investments  net  of  disposals  amounted  to 1.04 billion euros at 31(st) March
2010 (1.9  billion euros at  31(st) March 2009). Net cash  stood at 4.28 billion
euros  with available credit facilities of  1.2 billion euros (1.1 billion euros
as of April 2010).

Shareholders'  funds amounted to 5.42 billion euros after the negative impact of
the  change in fair value of hedging  instruments of 325 million euros. Net debt
stood  at  6.22 billion  euros  (4.44  billion  euros at 31(st) March 2009). The
gearing ratio* stood at 1.15, and 1.08 excluding hedging instruments.

At  the end of April  2010, the initial public offering  of Amadeus of which the
group  now holds 15.2%, generated  a capital gain  of 1.03 billion euros for the
group, of which 195 million euros of cash. Based on the balance sheet at 31(st)
March  2010, this  transaction  reduces  the  gearing  ratio  to 0.94, and 0.89
excluding derivative instruments.


Outlook

The  Financial Year  2010-11 started with  the shut  down of  European air space
following the volcanic eruption in Iceland. The quasi totality of our passenger,
cargo  and  leisure  activities  were  suspended  for  four  days, followed by a
progressive  reinstatement of the  schedules over three  further days. The group
estimates  the loss  in revenues  at 260 million  euros with  a 160 million euro
impact  on our operating result. As of  today, negotiations are ongoing with the
relevant  authorities concerning the eventual  level of compensation. Elsewhere,
we  are also actively working with the authorities to define a comprehensive and
pragmatic  approach to the volcanic  ash risk, so as  to avoid the repetition of
unnecessary flight operation stoppages in the future.

For  the current year, the group's priorities are to control costs via headcount
reduction,  and to  restore unit  revenues by  limiting capacity growth (+1% for
passenger  and zero for cargo). Elsewhere, the benefits of the measures launched
in 2009-10 to adapt both our products and our organization will continue to feed
through.

As a result, the group maintains its objective of operating break-even excluding
the  impact of pre-2009 hedges, and subject  to the final evaluation of the cost
of the European airspace closure, including any compensation.

*  As defined in the 2008-09 Reference Document p 117-118 and p.6 of the update;
reconciliation table available in results presentation



Information by business

Passenger

+--------------------------------+---------------------+-----------------------+
|                                | Quarter to 31(st)   |  Full Year to 31(st   |
|                                |        March        |        )March         |
|                                +------+------+-------+-------+-------+-------+
|                                | 2010 | 2009 |Change | 2010  | 2009  |Change |
+--------------------------------+------+------+-------+-------+-------+-------+
|Traffic (RPK millions)          |46,627|46,216| 0.9%  |202,455|209,060|(3.2)% |
+--------------------------------+------+------+-------+-------+-------+-------+
|Capacity (ASK millions)         |59,165|61,235|(3.4)% |251,012|262,356|(4.3)% |
+--------------------------------+------+------+-------+-------+-------+-------+
|Load factor                     |78.8% |75.5% |3.3 pts| 80.7% | 79.7% |1.0 pt |
+--------------------------------+------+------+-------+-------+-------+-------+
|Total passenger revenues (€ m)  |3,879 |3,931*|(1.3)% |16,267 |18,832 |(13.6)%|
+--------------------------------+------+------+-------+-------+-------+-------+
|Revenues from scheduled         |3,696 |3,723*|(7.3)% |15,489 |17,937 |(13.6)%|
|passenger business (€m)         |      |      |       |       |       |       |
+--------------------------------+------+------+-------+-------+-------+-------+
|Unit revenue per RPK (€ cts)    | 7.93 | 8.06 |(1.6)% | 7.65  | 8.58  |(10.8)%|
+--------------------------------+------+------+-------+-------+-------+-------+
|Unit revenue per RPK  ex        |  -   |  -   |(0.9)% |   -   |   -   |(11.4)%|
|currency (€ cts)                |      |      |       |       |       |       |
+--------------------------------+------+------+-------+-------+-------+-------+
|Unit revenue per ASK (€ cts)    | 6.25 | 6.08 | 2.7%  | 6.17  | 6.84  |(9.7)% |
+--------------------------------+------+------+-------+-------+-------+-------+
|Unit revenue per ASK  ex        |  -   |  -   | 3.5%  |   -   |   -   |(10.3)%|
|currency (€ cts)                |      |      |       |       |       |       |
+--------------------------------+------+------+-------+-------+-------+-------+
|Unit cost per ASK (€ cts)       | 6.81 | 6.60 | 3.1%  | 6.46  | 6.78  |(4.6)% |
+--------------------------------+------+------+-------+-------+-------+-------+
|Unit cost per ASK at constant   |  -   |  -   |(0.7)% |   -   |   -   |(1.5)% |
|currency and fuel price (€ cts) |      |      |       |       |       |       |
+--------------------------------+------+------+-------+-------+-------+-------+
|Operating income (€m)           |(381) |(365) |(4.4)% | (918) | (21)  |  nm   |
+--------------------------------+------+------+-------+-------+-------+-------+
* Restated for the application of IFRIC 13


Cargo

+------------------------------------+-------------------+---------------------+
|                                    |Quarter to 31(st)  | Full Year to 31(st  |
|                                    |       March       |       )March        |
|                                    +-----+-----+-------+------+------+-------+
|                                    |2010 |2009*|Change | 2010 |2009* |Change |
+------------------------------------+-----+-----+-------+------+------+-------+
|Traffic (RTK millions)              |2,751|2,732| 0.7%  |11,155|12,923|(13.7)%|
+------------------------------------+-----+-----+-------+------+------+-------+
|Capacity (ATK millions)             |3,977|4,530|(12.2)%|16,764|20,073|(16.5)%|
+------------------------------------+-----+-----+-------+------+------+-------+
|Load factor                         |69.2%|60.3%|8.9 pts|66.5% |64.4% |2.2 pts|
+------------------------------------+-----+-----+-------+------+------+-------+
|Load factor excluding Martinair     | 674 | 600 | 12.3% |2,439 |3,378 |(27.8)%|
+------------------------------------+-----+-----+-------+------+------+-------+
|Total cargo business revenues (€m)  | 639 | 550 | 16.2% |2,313 |3,191 |(27.5)%|
+------------------------------------+-----+-----+-------+------+------+-------+
|Revenues from the transportation of |23.13|20.77| 11.3% |20.74 |24.66 |(15.9)%|
|cargo (€m)                          |     |     |       |      |      |       |
+------------------------------------+-----+-----+-------+------+------+-------+
|Unit revenue per RTK (€ cts)        |  -  |  -  | 13.1% |  -   |  -   |(17.0)%|
+------------------------------------+-----+-----+-------+------+------+-------+
|Unit revenue per RTK ex currency (€ |16.08|12.48| 28.9% |13.79 |15.91 |(13.3)%|
|cts)                                |     |     |       |      |      |       |
+------------------------------------+-----+-----+-------+------+------+-------+
|Unit revenue per ATK (€ cts)        |  -  |  -  | 30.9% |  -   |  -   |(14.4)%|
+------------------------------------+-----+-----+-------+------+------+-------+
|Unit revenue per ATK ex currency (€ |17.39|15.86| 9.7%  |16.14 |16.83 |(4.1)% |
|cts)                                |     |     |       |      |      |       |
+------------------------------------+-----+-----+-------+------+------+-------+
|Unit cost per ATK (€ cts)           |  -  |  -  | 4.0%  |  -   |  -   | 3.3%  |
+------------------------------------+-----+-----+-------+------+------+-------+
|Unit cost per ATK on constant       |(63) |(164)|  nm   |(436) |(221) |  nm   |
|currency and fuel price (€ cts)     |     |     |       |      |      |       |
+------------------------------------+-----+-----+-------+------+------+-------+
* Pro forma Martinair



Maintenance

The  maintenance business realised  revenues of 233 million  euros in the Fourth
Quarter of 2009-10 against pro forma revenues including Martinair of 254 million
euros  at 31(st) March  2009, which had  been impacted  by non-recurring events.
Operating  income amounted  to 1 million  euros (47  million euros  pro forma at
31(st) March 2009).

For  the Full Year, revenues totalled 956 million euros versus 996 million euros
pro  forma a  year earlier,  impacted by  slightly weaker demand and intensified
competition. Operating income amounted to 81 million euros (98 million euros pro
forma at 31(st) March 2009).


Other businesses

'Other  Businesses' mainly include  the leisure activities  of Transavia and the
catering  business of  Servair. Revenues  amounted to  235 million euros  in the
Fourth  Quarter, versus pro forma revenues  of 275 million euros at 31(st) March
2009, a  decline  of  14.5% due  mainly  to  capacity  reductions  at  Transavia
Netherlands  and  the  reduction  of  the  leisure  activity  of  Martinair. The
operating  loss was stable relative to a  year earlier (-54 million euros versus
-53 million euros pro forma at 31(st) March 2009).

For  the full  year, the  revenues of  other businesses amounted to 1.33 billion
euros  versus 1.49 billion euros pro forma  a year earlier. The leisure business
recorded  revenues of 918 million euros (1.05 billion euros pro forma at 31(st)
March  2009) while catering generated 347 million euros in revenues (349 million
euros  a  year  earlier).  The  operating  loss  of Other Businesses was sharply
reduced  from 42 million euros pro forma at 31(st )March 2009 to just 12 million
euros at 31(st) March 2010, including a loss of 23 million euros for leisure (-3
million euros excluding the impact of pre-2009 fuel hedges) and operating income
of 19 million euros for catering.



Agenda

Wednesday 19(th) May 2010:

The Press Conference will be broadcast live today at 18:00 am CET on the Air
France website: 

http://corporate.airfrance.com
<

http://corporate.airfrance.com/>, with:

·         Pierre-Henri Gourgeon, President & CEO of Air France-KLM

·         Peter Hartman, President & CEO of KLM

·         Philippe Calavia, Executive Vice President and CFO of Air France-KLM





Air France-KLM fleet as of 31 March 2010

+--------+-------------------------------+---------------------------+-----------------------------------------+
|  Air-  |    Brit City Régio-     Trans-|      KLM    Trans- Martin-|      Finance Opera-         In   Change/|
| craft  |AF  Air  Jet   nal   VLM  avia |KLM Cityhop.  avia    air  |Owned  lease   ting  Total opera- 3/31/09|
|        |                               |                           |              lease         tion         |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|B747-   |13                             |22                         | 17      6      12  | 35  |  31     -4   |
|400     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|B777-   |30                             | 4                         | 17      6      11  | 34  |  34      6   |
|300     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|B777-   |25                             |15                         | 15      8      17  | 40  |  40          |
|200     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|B767-   |                               |                       4   |                4   |  4  |  4      -2   |
|300     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|A380-   | 2                             |                           |  1             1   |  2  |  2       2   |
|800     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|A340-   |18                             |                           | 11      2      5   | 18  |  18     -1   |
|300     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|A330-   |15                             |10                         |  5      7      13  | 25  |  25     -1   |
|200     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|MD      |                               |10                         |  8             2   | 10  |  10          |
|11      |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Total   |                               |                           |                    |     |              |
|long    |103                            |61                     4   | 74     29      65  | 168 | 164          |
|haul    |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|B747-   |                               |                           |                    |     |              |
|400     | 8                             | 4                     4   |  5      3      8   | 16  |  9      -5   |
|cargo   |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|B747-   |                               |                           |                    |     |              |
|200     | 1                             |                           |  1                 |  1  |              |
|cargo   |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|B777-   | 2                             |                           |         2          |  2  |  2           |
|cargo   |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|MD-     |                               |                           |                    |     |              |
|11-     |                               |                       4   |  3             1   |  4  |  4           |
|CF      |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|MD-     |                               |                           |                    |     |              |
|11-     |                               |                       3   |  2             1   |  3  |  3           |
|F       |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Total   |                               |                           |                    |     |              |
|freight-|11                             | 4                    11   | 11      5      10  | 26  |  18     -5   |
|er      |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|B737-   |                               | 5                         |         2      3   |  5  |  5           |
|900     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|B737-   |                           7   |21             19          |  3     17      27  | 47  |  47      1   |
|800     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|B737-   |                               | 6             10          |        11      5   | 16  |  16      2   |
|700     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|B737-   |                               | 9                         |  6             3   |  9  |  9      -3   |
|400     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|B737-   |                               | 7                         |  7                 |  7  |  7      -3   |
|300     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|A321    |24                             |                           | 12      1      11  | 24  |  23      2   |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|A320    |61                             |                           | 35      2      24  | 61  |  58     -7   |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|A319    |45                             |                           | 22      4      19  | 45  |  45          |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|A318    |18                             |                           | 18                 | 18  |  18          |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Total   |                               |                           |                    |     |              |
|me-     |148                        7   |48             29          | 103    37      92  | 232 | 228     -8   |
|dium    |                               |                           |                    |     |              |
|haul    |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|AVRO    |          27                   |                           | 15             12  | 27  |  23     -2   |
|RJ 85   |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Canad-  |                               |                           |                    |     |              |
|air     |     2                         |                           |                2   |  2  |  2       2   |
|Jet 900 |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Canad-  |                               |                           |                    |     |              |
|air     |     15                        |                           |  6      9          | 15  |  15          |
|Jet 700 |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Canad-  |                               |                           |                    |     |              |
|air     |     15                        |                           |  8      5      2   | 15  |  14     -1   |
|Jet 100 |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Em-     |                               |                           |                    |     |              |
|braer   |                10             |       13                  |  4      9      10  | 23  |  23     12   |
|190     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Em-     |                               |                           |                    |     |              |
|braer   |                7              |                           |  6      1          |  7  |  7       4   |
|170     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Em-     |                               |                           |                    |     |              |
|braer   |                28             |                           |  8     14      6   | 28  |  28          |
|145     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Em-     |                               |                           |                    |     |              |
|braer   |                9              |                           |  4      3      2   |  9  |  8      -1   |
|135     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Em-     |                               |                           |                    |     |              |
|braer   |                3              |                           |  3                 |  3  |              |
|120     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Fok-    |                               |                           |                    |     |              |
|ker     |     11         7              |       5                   |  9             14  | 23  |  23     -14  |
|100     |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Fok-    |                               |                           |                    |     |              |
|ker     |                               |       26                  | 23      3          | 26  |  26      1   |
|70      |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Fok-    |                               |                           |                    |     |              |
|ker     |                     17        |       4                   | 17             4   | 21  |  15     -15  |
|50      |                               |                           |                    |     |              |
+--------+-------------------------------+---------------------------+--------------------+-----+--------------+
|Total   |                               |                           |                    |     |              |
|Regio-  |     43   27    64   17        |       48                  | 103    44      52  | 199 | 184     -14  |
|nal     |                               |                           |                    |     |              |
+--------+---+----+----+------+---+------+---+--------+------+-------+-----+-------+------+-----+------+-------+
|        |   |    |    |      |   |      |   |        |      |       |     |       |      |     |      |       |
+--------+---+----+----+------+---+------+---+--------+------+-------+-----+-------+------+-----+------+-------+
|  Air-  |   |Brit|City|Régio-|   |Trans-|   |  KLM   |Trans-|Martin-|     |Finance|Opera-|     |  In  |Change/|
| craft  |AF |Air |Jet | nal  |VLM| avia |KLM|Cityhop.| avia |  air  |Owned| lease | ting |Total|opera-|3/31/09|
|        |   |    |    |      |   |      |   |        |      |       |     |       |lease |     | tion |       |
+--------+---+----+----+------+---+------+---+--------+------+-------+-----+-------+------+-----+------+-------+
| TOTAL  |262| 43 | 27 |  64  |17 |  7   |113|   48   |  29  |  15   | 291 |  115  | 219  | 625 | 594  |  -27  |
+--------+---+----+----+------+---+------+---+--------+------+-------+-----+-------+------+-----+------+-------+



Income statement as of March 31, 2010

+------------------+-------------------------------+---------------------------+
|                  |     Q4 (January to March)     |12 months (April to March) |
+------------------+-------+-------------+---------+-------+---------+---------+
|                  |       |      2008-09|         |       |         |         |
|                  |       |(adjusted and|         |       |  2008-09|         |
|In euros million  |2009-10|   pro forma)|Variation|2009-10|pro forma|Variation|
+------------------+-------+-------------+---------+-------+---------+---------+
|                  |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|SALES             |  5,021|        5,060|    -0.8%| 20,994|   24,693|   -15.0%|
+------------------+-------+-------------+---------+-------+---------+---------+
|Other revenues    |      1|            1|     0.0%|      5|        5|     0.0%|
+------------------+-------+-------------+---------+-------+---------+---------+
|EXTERNAL EXPENSES | -3,328|       -3,358|    -0.9%|-13,243|  -15,540|   -14.8%|
+------------------+-------+-------------+---------+-------+---------+---------+
|Aircraft fuel     | -1,240|       -1,134|     9.3%| -4,725|   -6,044|   -21.8%|
+------------------+-------+-------------+---------+-------+---------+---------+
|Chartering costs  |   -116|         -135|   -14.1%|   -487|     -641|   -24.0%|
+------------------+-------+-------------+---------+-------+---------+---------+
|Aircraft operating|   -182|         -179|     1.7%|   -721|     -678|     6.3%|
|lease costs       |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Landing fees and  |   -394|         -420|    -6.2%| -1,707|   -1,834|    -6.9%|
|en route charges  |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Catering          |   -108|         -111|    -2.7%|   -472|     -490|    -3.7%|
+------------------+-------+-------------+---------+-------+---------+---------+
|Handling charges  |       |             |         |       |         |         |
|and other         |   -311|         -328|    -5.2%| -1,281|   -1,408|    -9.0%|
|operating costs   |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Aircraft          |   -279|         -293|    -4.8%| -1,065|   -1,170|    -9.0%|
|maintenance costs |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Commercial and    |   -203|         -205|    -1.0%|   -854|   -1,023|   -16.5%|
|distribution costs|       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Other external    |   -495|         -553|   -10.5%| -1,931|   -2,252|   -14.3%|
|expenses          |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Salaries and      | -1,843|       -1,819|     1.3%| -7,388|   -7,423|    -0.5%|
|related costs     |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Taxes other than  |    -38|          -59|   -35.6%|   -216|     -250|   -13.6%|
|income taxes      |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Amortization and  |   -399|         -400|    -0.3%| -1,640|   -1,667|    -1.6%|
|depreciation      |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Provisions        |      7|          -18|  -138.9%|    -35|     -116|   -69.8%|
+------------------+-------+-------------+---------+-------+---------+---------+
|Other income and  |     82|           58|    41.4%|    238|      112|       nm|
|expenses          |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|INCOME FROM       |   -497|         -535|     7.1%| -1,285|     -186|       nm|
|CURRENT OPERATIONS|       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Sales of aircraft |    -21|            -|       nm|    -21|        5|       nm|
|equipment         |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Sales of          |      -|            6|       nm|      1|       13|       nm|
|subsidiaries      |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Negative goodwill |      -|            1|       nm|      -|       17|       nm|
+------------------+-------+-------------+---------+-------+---------+---------+
|Other non-current |       |             |         |       |         |         |
|income and        |   -240|          -57|       nm|   -327|     -106|       nm|
|expenses          |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|INCOME FROM       |       |             |         |       |         |         |
|OPERATING         |   -758|         -585|   -29.6%| -1,632|     -257|       nm|
|ACTIVITIES        |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Income from cash  |       |             |         |       |         |         |
|and cash          |     21|           35|   -40.0%|    106|      269|   -60.6%|
|equivalents       |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Cost of financial |   -112|          -82|    36.6%|   -410|     -372|    10.2%|
|debt              |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Net cost of       |    -91|          -47|    93.6%|   -304|     -103|       nm|
|financial debt    |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Foreign exchange  |       |             |         |       |         |         |
|gains (losses),   |    -88|          -27|       nm|    -26|     -195|       nm|
|net               |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Change in fair    |       |             |         |       |         |         |
|value of financial|     -7|          -65|       nm|   -160|     -707|       nm|
|assets and        |       |             |         |       |         |         |
|liabilities       |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Other financial   |       |             |         |       |         |         |
|income and        |      1|           -4|       nm|     -7|      -15|   -53.3%|
|expenses          |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|INCOME BEFORE TAX |   -943|         -728|   -29.5%| -2,129|   -1,277|   -66.7%|
+------------------+-------+-------------+---------+-------+---------+---------+
|Income taxes      |    249|          244|     2.0%|    586|      457|    28.2%|
+------------------+-------+-------------+---------+-------+---------+---------+
|NET INCOME OF     |       |             |         |       |         |         |
|CONSOLIDATED      |   -694|         -484|   -43.4%| -1,543|     -820|   -88.2%|
|COMPANIES         |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Share of profits  |       |             |         |       |         |         |
|(losses) of       |      1|            9|       nm|    -17|       18|       nm|
|associates        |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|INCOME FROM       |       |             |         |       |         |         |
|CONTINUING        |   -693|         -475|   -45.9%| -1,560|     -802|   -94.5%|
|OPERATIONS        |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Net income from   |       |             |         |       |         |         |
|discontinued      |      -|            -|        -|      -|        -|        -|
|operations        |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|NET INCOME FOR THE|   -693|         -475|   -45.9%| -1,560|     -802|   -94.5%|
|PERIOD            |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+
|Minority interest |      2|           -4|       nm|      1|       -9|       nm|
+------------------+-------+-------------+---------+-------+---------+---------+
|NET INCOME FOR THE|   -691|         -479|   -44.3%| -1,559|     -811|   -92.2%|
|PERIOD - GROUP    |       |             |         |       |         |         |
+------------------+-------+-------------+---------+-------+---------+---------+



Consolidated balance sheet

+------------------------------------------------+--------------+--------------+
|Assets                                          |              |              |
|                                                |March 31, 2010|March 31, 2009|
|                                   In € millions|              |              |
+------------------------------------------------+--------------+--------------+
|Goodwill                                        |           401|           400|
+------------------------------------------------+--------------+--------------+
|Intangible assets                               |           612|           559|
+------------------------------------------------+--------------+--------------+
|Flight equipment                                |        11,349|        12,125|
+------------------------------------------------+--------------+--------------+
|Other property, plant and equipment             |         2,252|         2,313|
+------------------------------------------------+--------------+--------------+
|Investments in equity associates                |           446|           446|
+------------------------------------------------+--------------+--------------+
|Pension assets                                  |         2,733|         2,499|
+------------------------------------------------+--------------+--------------+
|Other financial assets (including € 630  million|              |              |
|of deposits related to financial leases as of   |           840|           938|
|March 31, 2010 and  € 740 million as of March   |              |              |
|31, 2009)                                       |              |              |
+------------------------------------------------+--------------+--------------+
|Deferred tax assets                             |           942|           811|
+------------------------------------------------+--------------+--------------+
|Other non-current assets                        |           180|           629|
+------------------------------------------------+--------------+--------------+
|Total non-current assets                        |        19,755|        20,720|
+------------------------------------------------+--------------+--------------+
|Assets held for sale                            |            93|            93|
+------------------------------------------------+--------------+--------------+
|Other short-term financial assets (including €  |              |              |
|482  million of deposits related to financial   |              |              |
|leases and investments between 3 months and 1   |           517|           580|
|year as of March 31, 2010 and € 538 million as  |              |              |
|of March 31, 2009)                              |              |              |
+------------------------------------------------+--------------+--------------+
|Inventories                                     |           537|           527|
+------------------------------------------------+--------------+--------------+
|Trade accounts receivable                       |         2,142|         2,038|
+------------------------------------------------+--------------+--------------+
|Income tax receivables                          |             1|             2|
+------------------------------------------------+--------------+--------------+
|Other current assets                            |           979|         1,065|
+------------------------------------------------+--------------+--------------+
|Cash and cash equivalents                       |         3,751|         3,748|
+------------------------------------------------+--------------+--------------+
|Total current assets                            |         8,020|         8,053|
+------------------------------------------------+--------------+--------------+
|Total assets                                    |        27,775|        28,773|
+------------------------------------------------+--------------+--------------+


+------------------------------------------------+--------------+--------------+
|Liabilities and equity                          |              |              |
|                                                |March 31, 2010|March 31, 2009|
|                                   In € millions|              |              |
+------------------------------------------------+--------------+--------------+
|Issued capital                                  |         2,552|         2,552|
+------------------------------------------------+--------------+--------------+
|Additional paid-in capital                      |           719|           765|
+------------------------------------------------+--------------+--------------+
|Treasury shares                                 |         (106)|         (124)|
+------------------------------------------------+--------------+--------------+
|Reserves and retained earnings                  |         2,198|         2,429|
+------------------------------------------------+--------------+--------------+
|Equity attributable to equity holders of Air    |         5,363|         5,622|
|France-KLM                                      |              |              |
+------------------------------------------------+--------------+--------------+
|Minority interests                              |            55|            54|
+------------------------------------------------+--------------+--------------+
|Total Equity                                    |         5,418|         5,676|
+------------------------------------------------+--------------+--------------+
|Provisions and retirement benefits              |         1,432|         1,334|
+------------------------------------------------+--------------+--------------+
|Long-term debt                                  |         9,222|         7,864|
+------------------------------------------------+--------------+--------------+
|Deferred tax                                    |           418|           339|
+------------------------------------------------+--------------+--------------+
|Other non-current liabilities                   |           818|         2,170|
+------------------------------------------------+--------------+--------------+
|Total non-current liabilities                   |        11,890|        11,707|
+------------------------------------------------+--------------+--------------+
|Liability related to assets held for sale       |            10|             7|
+------------------------------------------------+--------------+--------------+
|Provisions                                      |           696|           480|
+------------------------------------------------+--------------+--------------+
|Current portion of long-term debt               |         1,825|         1,353|
+------------------------------------------------+--------------+--------------+
|Trade accounts payable                          |         2,032|         1,887|
+------------------------------------------------+--------------+--------------+
|Deferred revenue on ticket sales                |         2,340|         2,131|
+------------------------------------------------+--------------+--------------+
|Frequent flyer programs                         |           840|           917|
+------------------------------------------------+--------------+--------------+
|Current tax liabilities                         |            11|            11|
+------------------------------------------------+--------------+--------------+
|Other current liabilities                       |         2,597|         4,322|
+------------------------------------------------+--------------+--------------+
|Bank overdrafts                                 |           116|           282|
+------------------------------------------------+--------------+--------------+
|Total current liabilities                       |        10,467|        11,390|
+------------------------------------------------+--------------+--------------+
|Total liabilities                               |        22,357|        23,097|
+------------------------------------------------+--------------+--------------+
|Total liabilities and equity                    |        27,775|        28,773|
+------------------------------------------------+--------------+--------------+



Consolidated statement of cash flows

+-------------------------------------------------------------+--------+-------+
|Period from April 1 to March 31,                             |        |       |
|                                                             |2009-10 |2008-09|
|                                                In € millions|        |       |
+-------------------------------------------------------------+--------+-------+
|Net income for the period - Group                            | (1,559)|  (814)|
+-------------------------------------------------------------+--------+-------+
|Minority interests                                           |     (1)|      7|
+-------------------------------------------------------------+--------+-------+
|Amortization, depreciation and operating provisions          |   1,675|  1,719|
+-------------------------------------------------------------+--------+-------+
|Financial provisions                                         |       7|     14|
+-------------------------------------------------------------+--------+-------+
|Gain on disposals of tangible and intangible assets          |      61|   (22)|
+-------------------------------------------------------------+--------+-------+
|Loss / (gain) on disposals of subsidiaries and associates    |       -|   (13)|
+-------------------------------------------------------------+--------+-------+
|Reversal of provision for cargo investigation                |       -|  (225)|
+-------------------------------------------------------------+--------+-------+
|Derivatives - non monetary result                            |     (8)|    333|
+-------------------------------------------------------------+--------+-------+
|Unrealized foreign exchange gains and losses, net            |      13|      6|
+-------------------------------------------------------------+--------+-------+
|Negative goodwill                                            |       -|   (17)|
+-------------------------------------------------------------+--------+-------+
|Share of (profits) losses of associates                      |      17|     42|
+-------------------------------------------------------------+--------+-------+
|Deferred taxes                                               |   (591)|  (340)|
+-------------------------------------------------------------+--------+-------+
|Other non-monetary items                                     |     143|  (188)|
+-------------------------------------------------------------+--------+-------+
|Subtotal                                                     |   (243)|    502|
+-------------------------------------------------------------+--------+-------+
|(Increase) / decrease in inventories                         |    (28)|      8|
+-------------------------------------------------------------+--------+-------+
|(Increase) / decrease in trade receivables                   |    (89)|    676|
+-------------------------------------------------------------+--------+-------+
|Increase / (decrease) in trade payables                      |     126|  (401)|
+-------------------------------------------------------------+--------+-------+
|Change in other receivables and payables                     |   (564)|     13|
+-------------------------------------------------------------+--------+-------+
|Net cash flow from operating activities                      |   (798)|    798|
+-------------------------------------------------------------+--------+-------+
|Acquisitions of subsidiaries and investments in associates,  |    (18)|  (348)|
|net of cash acquired                                         |        |       |
+-------------------------------------------------------------+--------+-------+
|Purchase of property, plant and equipment and intangible     | (2,097)|(2,043)|
|assets                                                       |        |       |
+-------------------------------------------------------------+--------+-------+
|Proceeds on disposal of subsidiaries and investments in      |       3|     16|
|associates                                                   |        |       |
+-------------------------------------------------------------+--------+-------+
|Proceeds on disposal of property, plant and equipment and    |   1,053|    141|
|intangible assets                                            |        |       |
+-------------------------------------------------------------+--------+-------+
|Dividends received                                           |       5|      6|
+-------------------------------------------------------------+--------+-------+
|Decrease (increase) in investments, net between 3 months and |      87|  (246)|
|1 year                                                       |        |       |
+-------------------------------------------------------------+--------+-------+
|Net cash used in investing activities                        |   (967)|(2,474)|
+-------------------------------------------------------------+--------+-------+
|Increase in capital                                          |       -|      1|
+-------------------------------------------------------------+--------+-------+
|Issuance of long-term debt                                   |   2,704|  1,899|
+-------------------------------------------------------------+--------+-------+
|Repayments on long-term debt                                 |   (326)|  (312)|
+-------------------------------------------------------------+--------+-------+
|Payment of debt resulting from finance lease liabilities     |   (522)|  (573)|
+-------------------------------------------------------------+--------+-------+
|New loans                                                    |    (73)|   (58)|
+-------------------------------------------------------------+--------+-------+
|Repayments on loans                                          |     151|    149|
+-------------------------------------------------------------+--------+-------+
|Dividends paid                                               |     (3)|  (177)|
+-------------------------------------------------------------+--------+-------+
|Net cash flow from financing activities                      |   1,931|    929|
+-------------------------------------------------------------+--------+-------+
|Effect of exchange rate on cash and cash equivalents and bank|       3|      4|
|overdrafts                                                   |        |       |
+-------------------------------------------------------------+--------+-------+
|Change in cash and cash equivalents and bank overdrafts      |     169|  (743)|
+-------------------------------------------------------------+--------+-------+
|Cash and cash equivalents and bank overdrafts at beginning of|   3,466|  4,209|
|period                                                       |        |       |
+-------------------------------------------------------------+--------+-------+
|Cash and cash equivalents and bank overdrafts at end of      |   3,635|  3,466|
|period                                                       |        |       |
+-------------------------------------------------------------+--------+-------+


       Please note that the French version of this press release prevails

Air France Corporate Communications      KLM Corporate Communications

MEDIAS ONLY

Tel: + 33 (0)1 41 56 56 00 - Fax: + 33   Tel: +31 (0) 20 6494545 - Fax: +31 (0)
(0)1 41 56 84 19                         20 6488092

Internet: 

http://corporate.airfrance.com Internet: www.klm.com
<

http://www.airfrance.com/corporate>     <

http://www.klm.com/>





[HUG#1417370]





    Press Release: Air France-KLM year results 2009-2010: 

http://hugin.info/130669/R/1417370/367818.pdf


  



                                                                                                                                                                                                     

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