Airline profit despite Q4 loss

Published on Friday 20 May 2005 01:41

AIR France-KLM, the giant Franco-Dutch airline group, plunged into a loss in its fourth quarter, but still managed to salvage a full-year profit from cost savings carved out of the merger between the two carriers.

The group posted a net loss of €6 million (4.09m) for January-March after a €42m net profit in the year-earlier fourth quarter - despite a 5.4 per cent increase in revenue to €4.63 billion from €4.39bn.

Effective hedging policies took the sting out of a 50 per cent rise in oil prices, Air France-KLM said, limiting the increase in fuel costs to 22 per cent, while merger-related savings topped €115m for the year - well above initial forecasts of €65m.

"The impact of these synergies, together with the relentless pursuit of the cost control programmes implemented at both companies, have enabled us to generate a strong rise in our results, in spite of the sharp rise in oil prices during the second half," Air France-KLM chairman Jean-Cyril Spinetta said.

Full-year profit rose 20 per cent to €351m (€292m a year earlier) with revenue rising 7.3 per cent to €19.08bn from €17.8bn.