Posted Thursday, March 8, 2012, at 7:54 AM
Air France KLM head Jean-Cyril Spinetta (L) listens to KLM President and CEO Peter Hartman attend a press conference to present the Air France KLM 2011 results on March 8, 2012 in Paris.
Photo by JACQUES DEMARTHON/AFP/Getty Images
The enormous Franco-Dutch airline AirFrance-KLM posted its 2011 financial results this morning in Europe and the news is bleak, a loss of about $1 billion (or 809 million euros as they put it) driven by a staggering increase in fuel costs. The combination of a 2 percent increase in volumes, a 4 percent negative impact from currency dynamics, and a 13 percent net increase in the price of jet fuel after hedging left them with a 20.1 percent increase in the total fuel bill which wiped out any hope of profits. Shares have been sliding for a while now on speculation that the company may need to issue new shares (thus diluting the value of what existing shareholders already own) in order to raise money.