Air France-KLM Net Profit Jumps
Air France-KLM reported a big increase in full year net profit to EUR€792 million (USD$845 million), up from €118 million in 2015.
Operating income rose a more modest 34.5 percent to €1.05 billion on revenue down slightly to €24.85 billion, a 3.3 percent drop.
Aviation fuel provided a major saving, with costs dropping 25.7 percent to €4.6 billion. Fuel hedging losses were down €605 million compared to the previous year.
“While the fall in the oil price significantly reduced the Group’s costs, the geopolitical context, competition and industry overcapacity all resulted in lower unit revenues," Air France-KLM chief executive Jean-Marc Janaillac said.
Unit revenue per available seat km (ASK) dropped 5 percent during the year to end December 2016.
Traffic in revenue passenger km terms rose 1 percent on a capacity increase of 0.7 percent, with the resulting load factor up 0.3 percentage points at 85.4 percent.
The group carried 93.4 million passengers, a 4 percent increase on 2015.
Air France-KLM said it was continuing the restructuring of its cargo activity, dropping freighter capacity by 24 percent as it retired three MD11s. The operating result for its cargo business was flat with a €244 million loss.
Looking ahead, Air France-KLM said traffic statistics and forward bookings indicated a resilient start to the year, however “the global context remains highly uncertain regarding the geopolitical and economic environment.”
The group is targeting growth in passenger operations of between 3 and 3.5 percent in available seat km terms for 2017.