Profit jumps as price trends improve
Antoine Antoniol | Bloomberg | Getty Images
An Airbus A320 aircraft (L) and an Airbus A321 (R) stand on the tarmac at Roissy Charles de Gaulle airport in Paris, France.
Air France-KLM has also been benefiting from a return of U.S. and Asian passengers to Europe this year after attacks deterred travellers last year.
The group also said on Friday it would be introducing an 11 euros one-way surcharge on bookings made via third-party GDS systems, such as Amadeus, Travelport and Sabre from April 1, 2018. It is following the example of Lufthansa and British Airways as airlines use new technology to gain more control over ticket sales.
Air France-KLM said it still wanted to cut unit costs by 1-1.5 percent this year, although it now said that target was excluding effects caused by higher load factors and profit sharing.
The group’s French brand has lagged rivals on the cost-cutting front, leading to lower profitability. Air France reported a Q3 profit margin of 11 percent, with KLM at 18.5 percent. That compares with an operating profit margin of 18.1 for the Lufthansa brand and 21.5 percent for British Airways.
Its Air France business has set up a new lower cost airline Joon, which it hopes will attract a younger generation of customers and make it more competitive against leaner Gulf-based rivals and low cost carriers.
Air France-KLM did not give a profit outlook for the year. Analysts forecast on average 1.519 billion euros, which would be a 45 percent jump on last year.