Air France-KLM shares jump as profits rise despite fuel costs
Operating profit in the July to September period, one of the busiest for airlines, increased 10% to €1.35 billion, with passenger traffic up 1.8%.
Shares in Air France-KLM soared over 12% on Thursday after the airline outperformed expectations with a higher operating profit in the third quarter, despite a substantial increase in fuel costs. The company's operating profit rose by 10% to €1.35 billion ($1.5 billion) for the July to September period, marking one of the busiest times for airlines. Passenger traffic climbed by 1.8%, while unit revenue per available seat kilometre, a crucial profitability metric, increased by 6.6% to €9.70 cents.
Air France-KLM attributes its improved financials to higher ticket prices, which helped offset the adverse effects of soaring fuel costs. The company revealed that fuel expenses surged by €436 million in the third quarter compared to the same period last year. Despite this, the airline expects total fuel costs for the full year to reach €9.3 billion, up €2.3 billion from the previous year.
Group CEO Benjamin Smith highlighted the positive impact of strategic choices made in recent years, including the upscale positioning of Air France. The airline also plans to explore further structural measures to boost profitability, specifically targeting KLM's unit, which has lagged behind Air France in margins. KLM disclosed plans for a 15% overall job reduction, affecting around 5,000 positions, as part of a broader restructuring effort aimed at boosting earnings by €1 billion annually. Air France-KLM's shares closed at €12.69 on the Paris stock exchange.
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- Air France-KLM shares jump as profits rise despite fuel costs freemalaysiatoday.com
