The French-Dutch airline Air France-KLM achieved its goal of increasing profits in the second half of the year and reducing debt after beating earnings expectations for the quarter on the back of a weak euro and strong passenger traffic over the summer.
Operating income was $506 million in the quarter ended September 30 on sales of $7,18 billion, up 5,8% from a year ago, the airline said. That beat analysts' average estimates of $402 million and $7,04 billion, according to Thomson Reuters I/B/E/S.
"The group delivered a satisfying third quarter in all its businesses except cargo," Air France-KLM said in a statement. Air France-KLM said it had a "good summer season" for its passenger business, with passenger revenues growing by 7,9%. Its cargo business, on the other hand, was "further affected by the economic slowdown and the overcapacity situation in the sector".
The company – formed by the merger of the French and Dutch carriers in 2004 – it is cutting more than 5.000 jobs to try to cut costs and get back to growth. Air France-KLM said it managed to reduce costs by 1,1% in the quarter, excluding the effect of exchange rates. Taking into account currency effects, costs increased by 4,5%, including a 15% increase in the cost of fuel.
