Air France-KLM boosted by much higher profit

But airline group warns that its position remains fragile
Air France-KLM got a much-needed boost as it posted a better-than-expected rise in profits for the third quarter. But it is warning unions that improving demand will not remove the “overwhelming need” for cost cuts.
The airline group’s operating profit almost quadrupled to €898 million, on a 10.8% growth in revenues to €7.415 billion. The results were helped by the fact that a damaging pilot strike hit results a year earlier. Lower oil prices are also helping. It continues to forecast a €1 billion fall in debt in 2015 to €4.4 billion.
But after failing to reach a deal with pilots, the group lowered its forecast for unit cost savings in 2015 to 0.5-0.7% from 1-1.3%. It is urging unions to resume talks.
“This is fragile; it’s something that can’t last, not least because we don’t have enough visibility for the winter season when we see quite significant increases in (industry) capacity on European long-haul, and even more so intra-Europe,” finance director Pierre-Francois Riolacci said.
Reuters

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