Net profits fell 53 per cent year-on-year to €366 million, but Air France-KLM CEO Benjamin Smith said the results showed ‘resilience amid geopolitical uncertainties and softening macro-economic environment’. — Reuters pic
PARIS, Oct 31 — Net profits at French-Dutch airline Air France-KLM fell by more than half in the third quarter, hit by a stronger dollar and the withdrawal from service of the A380 super jumbo A380.
Air travel this year has also been buffeted by the economic uncertainty triggered by the US-China trade war as well as the political crises in Hong Kong, Argentina, Algeria and other countries.
Net profits fell 53 per cent year-on-year to €366 million (RM1.7 billion), but Air France-KLM CEO Benjamin Smith, a Canadian who took over as the airline’s first non-French chief last year, said the results showed “resilience amid geopolitical uncertainties and softening macro-economic environment.”
Operating profits fell 15.5 per cent to €900 million, a slide that the airline blamed partly on higher fuel costs.
In the previous quarter, operating profits had climbed by an equivalent amount, as the airline rebounded from a disastrous 2018, when Air France was crippled by strikes.
The group’s chief financial officer Frederic Gagey told journalists today that net profits in the third quarter had been squeezed by a strengthening dollar in late September and a €100 million charge related to the withdrawal of the airline’s seven A380s.
Airplane manufacturer Airbus in February announced that it was ending production of its giant double-decker A380, having struggled to secure enough orders to offset the programme’s massive costs.
Gagey estimated the cost to Air France-KLM of phasing out the aircraft by the end of 2022 at €400 million.
Despite the challenging environment Smith said he was “confident” that the airline could meet its full-year target of reducing costs by up to one per cent. — Reuters
