2023-10-27 19:40:25
Air France KLM, saved from bankruptcy by the French and Dutch states during the pandemic, seems to have emerged from the turbulence zone. Better still, the financial results for the third quarter are exceptional. And never since its creation has the group been so profitable. Its operating profit reached 1.34 billion euros with an increase of 31%, its turnover of 8.66 billion euros showed an increase of 6.8%. As a result, the company’s margin reached a record of 15.5%. These good results are a continuation of those achieved in the first half of the year with profits of 1.19 billion euros which already far exceed those of the previous year of 728 million euros.
Another subject of satisfaction. Unlike the first part of the year, all the group’s entities contributed to profits thanks to the summer period. If Air France remains the main source of cash, KLM has once again become the most profitable with a margin of 15.7% and 539 million euros in operating profit. Same thing for the low-cost subsidiary Transavia which posted a record margin of 18.5%, with 188 million euros in profit.
The number of passengers on the rise
To explain this spectacular jump, Air France-KLM was helped by a respite in oil prices and a positive exchange rate effect which helped offset rising costs due to inflation and salary increases. But above all, the group saw passenger demand increase and managed to increase its revenue per passenger, in particular by passing fare increases (+ 1.8%). During the third quarter, the group deployed 6% more seats to reach 94% of the 2019 level. Its aircraft occupancy rate also increased to reach 90%.
The only downside is that the group’s cargo activity fell by 39%. But Air France puts things into perspective by estimating that unit freight revenue still remains higher than it was before Covid.
Investors demand more
However, despite its results, the stock was seriously disrupted in the morning on the Paris Stock Exchange. Investors were asking for more and wondering about the development and impact of the war between Israel and Hamas. Already four destinations have been suspended for geopolitical reasons (three in Africa and Tel Aviv).
Even if Air France has already repaid state aid during the Covid period, the group still carries behind it a debt of around 5 billion euros. A ball and chain that could put obstacles in the way of renewing its fleet or in external growth operations such as acquiring 19.6% of the Scandinavian SAS. At the end of September, Air France announced its desire to purchase at least 50 Airbus A350s to renew Air France’s long-haul fleet.
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