Air France-KLM’s run of good news has continued with a strong set of third quarter results, showing pre-tax profit up 7.3 per cent to €915m in the three months to the end of September.
After securing a new chief executive and a wage deal with the majority of its unions in recent months, AF-KLM beat analysts’ consensus for revenue at €7.55bn, up 5.8 per cent at constant currency and operating profit of €1.07bn, 11 per cent above consensus.
New chief executive Benjamin Smith said:
Air France-KLM posted a solid performance in the summer quarter 2018, reflecting the commitment of all its staff, its commercial strengths and the attractiveness of its brands. The agreement on salaries signed at Air France brings stability as well as new perspectives for our businesses and employees.
The quarter’s numbers could not entirely rescue the company’s results for the year to date, badly affected by strikes which cost it €335m in the first half. In the first nine months, pre-tax profit was down 45.3 per cent, and both Air France and the stronger KLM had negative operating margins of -3.5 per cent and -0.7 per cent respectively.
Revenue per available seat kilometre, a standard industry unit, was up 2 per cent for the quarter and cost per ASK was down 1 per cent, a strong result given a surge in the fuel price.
The company said passenger revenue would increase in the final quarter, but it warned that fuel still had further to rise: “The 2018 fuel bill is expected to increase by €500m compared to last year, and the 2019 fuel bill is expected to increase by €900m compared to 2018.”
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