Fruit of almost full planes, high prices and the success of the “business” and “premium economy” classes, these “very solid” results allow the Franco-Dutch airline group to reduce its debt again, he announced. Friday.
It will thus repay in advance next month a billion euros of loans guaranteed by the French State, out of 3.5 billion still due.
Air France-KLM took advantage of the crucial summer period by carrying 25 million passengers, 47.6% more than in the third quarter of 2021.
But its turnover did much better, jumping 77.6% to 8.11 billion euros, a level 500 million euros higher than that of the third quarter of 2019, before the outbreak of the Covid.
However, Air France-KLM deployed only 89% of its 2019 seat capacity this summer, with an occupancy rate of 88%.
Thanks to the profit of the third quarter – nevertheless weighed down by 300 million euros by the strong dollar, according to the financial director Steven Zaat -, the company goes from 232 million euros in the green over the first nine months of the year. It had lost 7.1 billion euros in 2020 and 3.3 billion in 2021.
Its net debt has decreased by 2.2 billion euros since the end of 2021, to 5.9 billion.
Despite this improvement, the Paris Stock Exchange reacted badly, with Air France shares falling 5% shortly after opening.
Analysts were expecting an even higher net profit. Those of Stifel pointed to accounts that are still fragile in the face of a “deterioration in market fundamentals” feared next year, in particular the erosion of purchasing power.
“In the fourth quarter, we have already sold 75% of the available seats (…) we do not see any reduction in demand” for the winter, insisted Mr. Zaat during a telephone press conference: the group wants deploy around 85% of its pre-crisis offer in the current quarter and around 90% in the first quarter of 2023.
Saved from bankruptcy by the French and Dutch states, and recapitalized twice, it emerged intrinsically more profitable from the Covid-19 crisis, after a weight loss cure in terms of both staff and aircraft.
In addition, “in response to the increase in fuel prices and the increase in other external costs, the Group made several price increases on all its long-haul flights during the first half of the year” and has also seen its profitability per seat boosted by the success of its superior cabin classes.
Consequence: operating margins of 11.4% for Air France and 13.4% at KLM over the quarter, in particular thanks to the profitable connections with North America, which are very popular.
The “low cost” Transavia, whose fleet is expanding and on which Air France-KLM is counting to return to the green on the French domestic market, will for its part reach in 2022 a capacity in available seat-kilometres of 115% per compared to 2019, even rising to more than 140% in the fourth quarter.
The group’s performance would have been even better without the explosion in oil prices: the kerosene bill reached 2.3 billion euros in the third quarter alone, an increase of 181% over one year.
Other headwinds, staff shortages at Amsterdam-Schiphol, KLM’s “hub”, have forced the company to cancel many flights this summer. “Significant progress” has been made since, said the group’s chief executive, Benjamin Smith.
Air France-KLM estimates that it will end the year with an operating profit of more than 900 million euros, not far from 1.14 billion in 2019.
On the strength of this recovery, he wants to take advantage of opportunities for consolidation in the aviation sector in Europe: member of a consortium selected to negotiate the takeover of the Italian company ITA, he is also interested in the Portuguese TAP, confirmed Mr. Smith on Friday .
The group is open “to a partnership” with TAP, or “an equity stake” in the company, renationalized urgently during the health crisis, added the business manager, while according to the Portuguese press, Lufthansa, an unfortunate competitor in the ITA file, is also in the running.
