Air France-KLM's Quarterly Profit Triples
Wednesday November 23, 11:30 am ET
By Laurence Frost, AP Business Writer
Air France-KLM's Quarterly Profit Triples on One-Time Gain; Revenue Also Soars
PARIS (AP) -- Air France-KLM Group, the world's largest airline, said Wednesday its quarterly net profit more than tripled, aided by a one-time gain from the sale of its stake in the Amadeus booking system. Revenue also surged, suggesting the 2004 merger of Air France and KLM Royal Dutch Airlines is proving to be a success.
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Net profit in the July-September fiscal second quarter rose to 717 million euros ($839 million), or 2.73 euros ($3.19) per share, from 195 million euros, or 76 euro cents per share, in the same period last year.
Excluding the 419 million euro ($490 million) windfall from the sale of its Amadeus stake, Air France-KLM's profit rose 53 percent to 298 million euros ($349 million), beating a forecast of 292 million euros ($342 million) by Paris-based Exane-BNP.
By early afternoon in Paris, the results had propelled Air France-KLM shares 4 percent higher to 15.27 euros ($17.87).
After years of negotiation, the merger of Air France and KLM Royal Dutch Airlines closed in May 2004 to create a new carrier which leads the world in revenue.
Passenger traffic grew by 9 percent in the latest quarter, the company said, and operating profit rose 56 percent to 528 million euros ($618 million) on a 10 percent increase in revenue to 5.64 billion euros ($6.59 billion), defying a 29 percent fuel-price hike.
The share of passengers taking Air France-KLM connecting flights also grew -- to 39 percent from 35 percent -- in a sign that the combination of the Air France and KLM networks is driving growth by offering improved flight frequencies and route flexibility to customers.
"We've made very good advantage of that increased offer," said Air France-KLM Vice Chairman Leo Van Wijk, who was KLM's chief executive before the merger.
Business class revenue also increased by 16 percent -- twice the overall rate on a per-seat basis, taking into account distance flown -- and long-haul traffic outstripped growth in traffic on medium- and short-haul flights, where Air France-KLM and other long-established carriers have been squeezed by competition from low-cost rivals.
Passenger numbers increased faster than the airline's capacity, Van Wijk said, increasing the load factor -- the proportion of seats that carrier manages to fill with paying customers -- to 82 percent.
Buoyant passenger traffic and reservations suggest the full fiscal year will be "in line with these good results," Air France-KLM said, predicting a "clearly positive" operating profit. Net debt fell to 4.71 billion euros ($5.51 billion) at Sept. 30 from 5.64 billion euros at the end of March.
The airline also confirmed that it plans to contribute 20 million euros ($23 million) to a planned 1 billion euro ($1.2 billion) capital increase by Alitalia SPA, in order to maintain its current 2 percent stake in the Italian carrier. |
