By Piotr Lipinski

PARIS (Reuters). AIR France-KLM announced Thursday that it plans to raise as much as 4 billion euros ($4.6billion) to pay back state pandemic aids. This was in contrast to its strong earnings and its share price drop of more than 4%.

In 2020, the airline received loans of 10.4 billion euro from France and the Netherlands. This confirmed that the airline needed to make a cash call.

It did not provide any details about fundraising terms or timing. It stated that Air France-KLM would remain flexible in relation to transaction structures and sequencing, along with the size of instruments depending on market conditions.

The amount of money needed to raise funds is comparable with its current market value, which stands at just under 3 billion euros. On Wednesday, its shares reached an intraday record of 4.267 Euros. By 0926 GMT, they were around 4.5% lower.

Fourth-quarter results were helped by an increase in transatlantic travel as the United States opened its doors to immunized travelers in November.

According to the group, bookings have been increasing as Omicron restrictions begin to relax.

The fourth quarter’s core profit, or EBITDA, was 827 million euros. This is an increase from Q3 796 million. It also marks the second consecutive quarter of profitability at this level since the start of the pandemic.

CAPACITY INCREASE

EBITDA was 745 Million Euros in the last year, surpassing analysts predictions and company guidance for a “slightly positive” figure.

Steven Zaat is the chief financial officer. He stated that the airline had increased long-haul capacity in the fourth quarter, despite the resurgence in coronavirus cases from the Omicron variant. This Omicron variant can cause severe damage to short- and mid-haul European travel.

The company expects EBITDA will break even in the first quarter. However, available seat kilometers for group network passengers activity are at 73%-78% below 2019 levels. This quarter was impacted by Omicron and slowdowns in business travel, as most companies continue to work from home.

Mulder stated, “We don’t believe that competition will be sitting on its hands. So high yields might not reach them, especially as company travel continues to suffer.” Mulder also spoke of the group’s ambitious goal to achieve 2019 capacity levels by 2024, and an “ambitious outlook on margins, and debt.

Zaat indicated that the bookings are starting to catch up since last week.

This company reported a net loss of 3.29 Billion Euros, which was better than expected. Refinitiv polled 13.97 billion and found that 14.32 Billion was more than the average estimate.

($1 = 0.8784 euros)