Home News Business News Air France-KLM report 42% operating profit increase in 2017

Air France-KLM report 42% operating profit increase in 2017

Air France-KLM

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The airline Air France-KLM report 42% operating profit increase in 2017 to 1.49 billion EUR. However, the report remains below the analysts expectations for 1.53 billion EUR. The group also reported a net loss of 274 million EUR in 2017 due to a cost of 1.4 billion EUR related to a new retirement deal with KLM pilots and cabin crew.
However, Air France-KLM forecast higher revenue from ticket prices in the first quarter of this. The carrier will also offer more places for its routes to Asia and Latin America to meet the stronger demand, although competition from high-speed trains influences its performance in France.
Like other European airlines, Air France-KLM has benefited from low oil prices and strong customer demand last year, especially since the bankruptcy of Monarch and Air Berlin has eliminated some of the competition.
The company also benefits from the return of passengers from Asia and Latin America. It plans to increase its capacity by 3-4% overall on its main passenger network this year.
The company’s Chief Financial Officer Frederic Gagey said that pre-booking for long flights increased by 1 percentage point for February, by 4 percentage points for March, but decreased by 1 percentage point in April for Easter and rose again by 2 percentage points for May.
The analysts expect Air France-KLM to be under pressure this year due to rising fuel costs and the expansion of low-cost rivals in Paris and Amsterdam. In addition, the company will have to negotiate because of increased labor cost pressures, with trade unions planning a February 22 strike demanding a 6% increase in pay.
Frederic Gagey added that France’s local unit revenue was under pressure from new high-speed rail routes to Bordeaux, and that the group closely watched developments around new low-budget players.