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Shares in Franco-Dutch airline Air France-KLM have been given a lift this morning after the carrier said it was planning to redouble its cost-cutting efforts and revealed a 35 per cent climb in earnings.
The airline is among the biggest risers in Europe this morning despite warning of a “highly uncertain” macro-economic environment in 2017, up 8.05 per cent at publication time to €5.88. Shares are on course for their best day in over a year.
Air France-KLM’s full-year results came in ahead of consensus, with analysts at Liberum noting that its fourth quarter revenue performance was “was not quite as negative as Q3″.
Overall operating income was up 34 per cent to €1.05bn, with its operating margin up to 4.2 per cent from 3 per cent last year. Overall revenues slipped 3 per cent to €24.8bn.
“The improvement in profit was driven by a lower fuel bill, which more than offset adverse trends in currencies and unit revenues. The outlook is mixed, with the fuel bill set to start rising again, but the headwinds set to remain” said Gerald Khoo at Liberum.
Quirijn Mulder at ING added:
January traffic statistics and forward bookings indicates a resilient start to the new year and unit revenues down by 0.7%.
The target is to grow passenger numbers by 3-3.5%, aiming to regain market share on long haul. We expect the fuel bill to be only $100m higher year on year, modest compared to the total amount of almost €5bn thanks to favourable hedging.