Air France-KLM is offering more seats for sale and predicting a return to profitability this quarter as vaccination and an easing of travel restrictions improves bookings. The carrier has stopped bleeding cash and plans to offer 60% to 70% of 2019 network capacity this quarter, according to an earnings statement Friday. That’s higher than the 48% achieved in the previous three-month period and more than it predicted in May. While the airline declined to provide an outlook for Q1, citing uncertainty about further transatlantic reopening that would allow Europeans to travel to the US, it said the first signs of recovery have been visible since June. As a result, Air France-KLM is forecasting Q3 earnings before interest, taxes, depreciation and amortization will be positive for the first time since the pandemic began. Free cash generation at both the French and Dutch arms stemmed from “fantastic ticket sales in the second quarter,” CFO Steven Zaat said on a call. “Where people can travel, they will travel.” The relative optimism comes after a rough year for the carrier that has survived the coronavirus health crisis only through massive state aid from France and the Netherlands, which together now own about 38% of the company. Air France-KLM is party to talks between the Dutch state and the EC for a further financial package to help ease its debt load. The ongoing discussions are “very positive,” Zaat said, declining to provide details on when a deal could be reached.<br/>
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Garuda Indonesia was in the red for Q1 of the year, as declining revenue outpaced a reduction in costs amid less flying during the pandemic. For the three months ended 31 March, the Indonesian flag carrier reported an operating loss of $287m, reversing the $616,000 profit it reported during the same period in 2020. Revenue fell 54% year on year to $353m, outpacing a decline in costs, which slipped 26% to $702m. The embattled SkyTeam carrier reported a net loss of $384m, widening the $120m net loss in 2020. As with its 2020 annual results, Garuda ended the quarter with liabilities exceeding assets by $4b, and negative equity, at $2.3b. In its annual results, independent auditors cast doubt on Garuda’s ability to continue as a going concern, noting that the airline group had been unable to meet its financial obligations and had incurred significant losses. While Garuda states that it will do its best to bring costs down and improve its financial situation, it acknowledges that there are several factors “beyond the group’s control and may adversely affect the group’s financial performance and ability to continue as a going concern”. <br/>