Air France-KLM shares rose 6% on back of profit growth and ticket bookings
2023.02.17 12:25
Air France-KLM shares rose 6% on back of profit growth and ticket bookings
By Ray Johnson
Budrigannews.com – Air France-KLM reported a better-than-expected fourth-quarter operating profit on Friday, indicating that 2023 bookings were close to pre-pandemic levels and that global travel demand was rebounding.
In early trading, the airline’s shares gained more than 6%, reaching their highest level since June and outperforming the overall weak stock market. At 08:05 GMT, the pan-European was down 0.85 percent.
With an increase of almost 50% year-over-year, the carrier reported its highest fourth-quarter revenue of 7.1 billion euros ($7.55 billion).
Despite the fact that it beat estimates, operating profit increased by 45 percent to 134 million euros due to higher costs, including fuel.
According to Chief Financial Officer Steven Zaat, the travel industry struggled with restrictions imposed by the pandemic and saw price increases in jet fuel and other essential goods as a result of the Russia-Ukraine conflict.
In addition, Air France lost 170 million euros in revenue last year as a result of travel disruptions at Amsterdam’s Schiphol airport, which restricted capacity due to staff shortages the previous year.
Zaat continued, “I’m very happy that we can now say that we can say that 2022 Q4 ended better than where we ended in Q4 2019.”
The company reported a net debt of 6.3 billion euros, a decrease of 1.9 billion euros from the previous year, and stated that it was on track to repay all French state aid by April 2023.
However, according to Zaat, the staffing shortages at Schiphol airport might not be resolved until the end of June.
Due to ongoing operational difficulties and a 440,000-flight-per-year flight cap imposed by the Dutch government, Royal Schiphol Group stated on Friday that it was uncertain when the airport would return to 2019 traffic levels.
It is improving, which is very encouraging. “Of course, we are still affected by the fact that there are labor shortages everywhere, including at the airport,” Zaat stated. “However, we see that gradually operations are actually returning to normal.”
Ben Smith, the chief executive officer of Air France-KLM, also warned that European airlines would have to compete with Chinese airlines, which can still fly over Russian airspace.
Smith stated to the Financial Times, “It can add up to three hours in flight time between Paris and Seoul.” They have an unfair advantage over us if a Chinese airline is flying over Russia.
