Air France-KLM off to a flier as earnings more than double

Published on Thursday 2 September 2004 15:29

AIRLINE giant Air France-KLM today said it had more than doubled its first-quarter profits as its posted its first set of combined results since merging.

The world’s largest carrier by revenues also racked up a 12.3 per cent surge in sales as it bounced back from the first quarter of 2003 - a period affected by strikes, the Sars virus and the war in Iraq.

Air France unveiled its 540 million takeover of Dutch rival KLM a year ago, but the cross-border acquisition - the first of its kind in the airline industry - was only finalised in May, meaning just two months of KLM results were included in the first-quarter figures.

The company, which runs services under both the Air France and KLM brands, including flights to and from Edinburgh, said group net profits had jumped 106.5 per cent to some 64.6m. Meanwhile, turnover in the three months to the end of June rose to just over 3.03 billion from 2.7bn last time round.

Today’s results still fell short of analysts’ forecasts due to the impact of high oil prices, but the airline flagged up a "substantial rise" in full-year operating income before aircraft disposals.

Commenting on the figures, Nick van den Brul, an analyst at Exane BNP Paribas, said: "I don’t think the results themselves will shine, although they are pretty good. However, I think the stock will have a modestly positive reaction on the confirmation of the profit target, even at high oil prices."

The group confirmed its target for a substantial rise in operating income based on an average market price for oil of $40 per barrel for the remainder of the financial year.