Air France-KLM is heading “in the right direction” after first profit since 2019

An Air France Boeing 777-300 is seen on the tarmac at Paris Charles de Gaulle airport in Roissy near Paris, France, September 29, 2021. REUTERS/Gonzalo Fuentes/

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  • Sees capacity levels between 85% and 90% in Q4
  • Records additional compensation costs of 70 million euros in the second quarter
  • Expects a high yield environment in 2022, above 2019 levels
  • Consider a hybrid bond issue up to 1.2 billion euros
  • “The balance sheet still needs to be repaired” – Irving de Bernstein

July 29 (Reuters) – Air France-KLM’s (AIRF.PA) quarterly results beat market expectations on Friday as demand for summer travel surged despite ongoing operational problems in the airport sector.

“Air France-KLM continues to impress,” Bernstein analyst Alex Irving wrote in a note to clients, adding that the airline appears “to have pulled off a surprising transformation.”

The company’s second-quarter basic and net results came in with a profit of 386 million euros ($394.38 million) and 324 million euros, respectively, well above analysts’ forecasts. .

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It was the first net profit made by the French group before the coronavirus pandemic, from 2020, abruptly interrupted travel.

Germany’s Lufthansa (LHAG.DE) also said in July that it returned to profitability in the quarter, with adjusted earnings (EBIT) estimated at between 350 and 400 million euros. Read more

Air France-KLM shares were up 5.7% at 10:01 GMT.

“The group is rapidly moving in the right direction,” Irving added, noting an “optimistic outlook.”

“While the company has adjusted its third quarter capacity guidance downwards (…), feedback for the rest of the year looks broadly positive,” Stifel analysts said.

Air France-KLM sees capacity in the third quarter to be between 80% and 85% of pre-pandemic levels in 2019, reducing a forecast it made in May by 85% to 90%.


Airlines across Europe are facing labor disputes this summer as a rapid recovery in tourism has led to staff shortages and soaring inflation has prompted workers to demand higher wages.

“This booming demand has taken many by surprise,” chief executive Ben Smith told analysts on a call.

“The strong recovery we are seeing this summer is testing the entire aviation industry,” he also said in a statement. “Our airlines are not immune to the major operational challenges unfolding around the world.”

To deal with the disruption, KLM, alongside Lufthansa, British Airways and easyJet (EZJ.L), cut flights and was forced to impose a limit on ticket sales. Read more

For Stifel analysts, however, Air France is increasing its capacity faster than its European peers, while Paris remains “one of the healthiest air markets in Europe”.

($1 = 0.9788 euros)

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Reporting by Dina Kartit and Juliette Portala, editing by David Gregorio, Jason Neely and Louise Heavens

Our standards: The Thomson Reuters Trust Principles.

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