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Air France-KLM profit drops as US demand weakens
Air France-KLM profit drops as US demand weakens
Shares in Air France-KLM sank on Thursday after the Franco-Dutch group posted a drop in third-quarter net profit, citing a "challenging environment" due to higher costs and lower US travel demand.
Its profit after tax fell seven percent to 768 million euros in the July-September period but it maintained its financial targets for the full year.
Air France-KLM was also hit by a soft performance in its cargo unit and lower-than-expected results at its budget carrier Transavia during the key summer season, but it benefited from a sharp fall in fuel prices.
"During the third quarter, Air France-KLM once again demonstrated its resilience in a challenging environment," chief executive Benjamin Smith said in a statement.
Air France-KLM shares fell almost 12 percent in morning deals on the Paris stock exchange.
The group said passenger numbers rose 4.7 percent year-on-year over the summer, reaching 29.2 million between July and September.
But it also added more seats than it could fill.
As a result, its planes were slightly less full on average, with 88.8 percent of seats occupied compared to 89.3 percent last year.
Revenue increased 2.6 percent to 9.2 billion euros, lower than the 9.4 billion euros expected by analysts.
The comparison was helped by a weak base last year, when travel to Paris was dampened by the 2024 Olympics.
Costs rose 1.3 percent, at the lower end of the company's target range, partly due to a 41-percent jump in airport fees at Amsterdam Schiphol airport, KLM's main hub.
Like German rival Lufthansa, Air France-KLM noted a decline in ticket demand for flights to the United States, where tighter visa rules have made travel more difficult.
Around 89 percent of seats on flights to North American were taken in the third quarter, down from 90 percent in the same period last year.
tq/lth/gil
This article was generated from an automated news agency feed without modifications to text.
