Air France-KLM Reports Strong Q3 Performance
Air France-KLM has announced a strong financial performance for the third quarter, driven by robust demand for air travel during the summer. Despite facing challenges such as inflation and high fuel prices, the Franco-Dutch carrier group saw an increase in revenue and profit.
Impressive Revenue and Passenger Growth
During the three-month period ending in September, Air France-KLM reported a revenue of €8.66 billion, representing a 6.8% year-on-year increase. The group also witnessed a significant uptick in passenger numbers, handling 26.9 million travelers, a growth of 7.6% compared to the previous year.
CEO Benjamin Smith Commends Summer Demand
Chief Executive Officer Benjamin Smith attributes the positive results to strong demand experienced during the summer season. The surge in passenger volumes contributed to the favorable performance.
Profit Surge, Meeting Margins
Net profit soared to €931 million from €460 million, demonstrating substantial growth. Additionally, operating profit climbed to €1.34 billion from €1.02 billion, achieving a commendable 15.5% operating margin.
Expectations Fall Short
While the Q3 performance is impressive, it fell slightly below analysts' expectations. A company-provided consensus, based on estimates from 15 financial analysts, projected revenue of €8.72 billion, net profit of €957 million, and operating profit of €1.37 billion.
Addressing Cost Challenges
Air France-KLM has been grappling with increased costs associated with inflation. These costs primarily arise from higher salaries, as well as air traffic control charges and airport fees. Despite this, the group forecasts a modest single-digit increase in costs for the year.
Positive Outlook for Capacity
The carrier remains optimistic about capacity levels, expecting them to reach approximately 95% of 2019 figures by the end of this year.
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