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 12.5% to €12.69 on the Paris stock exchange on Thursday. The airline defied expectations by reporting a higher operating profit in Q3, despite a significant increase in jet fuel costs. The company attributed its improved performance to higher ticket prices, which helped offset the effects of the soaring fuel bill.
Air France-KLM's operating profit for Q3 rose 10% to €1.35 billion, driven by a 1.8% increase in passenger traffic. Unit revenue per available seat kilometre (ASK), a key profitability metric, climbed 6.6% to €9.70. The airline expects total fuel costs to reach €9.3 billion for the full year, a €2.3 billion increase from the previous year.
Air France-KLM's CEO, Benjamin Smith, credited the company's strategic decisions, such as its move upmarket, for the positive outcome. KLM, the Dutch unit of Air France-KLM, plans to implement further structural measures, including a 15% job cut, with around 5,000 positions reorganized. The airline aims to boost earnings by €1 billion annually.
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