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France's ADP sees slow recovery as airlines revamp networks

Credit: REUTERS/CHARLES PLATIAU

French airport operator ADP said its passenger traffic could take as long as seven years to recover completely from the coronavirus crisis, as airlines overhaul route networks.

Adds details, comments, background

PARIS, July 27 (Reuters) - French airport operator ADP ADP.PAsaid its passenger traffic could take as long as seven years to recover completely from the coronavirus crisis, as airlines overhaul route networks.

Transit airports such as Paris Charles de Gaulle will suffer more than most, the French group warned, as it swung to a 543 million-euro ($638 million) first-half net loss, reflecting the pandemic's crippling impact on air travel.

"The recovery will be very gradual," Chief Executive Augustin de Romanet said. "A return to the 2019 traffic level in Paris is anticipated between 2024 and 2027."

ADP gave no 2020 earnings guidance, saying the impact of the crisis "cannot be precisely assessed at this stage".

The airport group, which has opened talks with unions on job cuts, was reporting results on a day when new British quarantine measures shook the European travel sector and its hopes for a steady recovery through the summer.

January-June revenue fell 47% to 1.17 billion euros as passenger traffic dropped 58%, led by a 62% decline in Paris to 19.8 million passengersat Charles de Gaulle and Orlycombined.

The loss included 201 million euros in asset impairments, while earnings before interest, debt and amortization (EBITDA) fell to 39 million euros from 764 million. Net debt swelled to 6.58 billion euros from 5.25 billion in December.

Layover traffic will suffer in coming years as airlines and scrap less profitable routes in a broad network overhaul, Chief Financial Officer Philippe Pascal predicted. "That works mechanically against a transit hub like Charles de Gaulle."

The group, which is cutting 2020 investment by 400 million euros, said it would also review longer-term strategy "to move from a growth-support model to... a situation in which activities and investments will be reduced".

($1 = 0.8509 euros)

(Reporting by Laurence Frost; Editing by Gareth Jones)

((laurence.frost@thomsonreuters.com; +33 1 4949 5683 @Laurence_Frost DMs on; Reuters Messaging: N/A))

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