Air France-KLM reported a decline in third-quarter and nine-month operating profits due to rising fuel costs and the strong dollar.
The Air France-KLM group reported passenger numbers and revenue up 2% in the three months to September, but operating profits down €77 million to €1,065 million.
The group, which includes short-haul budget carrier Transavia and Paris-based long-haul outfit Joon, saw its nine-month operating profit fall €403 million to €1.29 billion.
Group net profit for the nine months fell €464 million to €627 million.
Air France-KLM noted its 2018 fuel bill would be €500 million higher than in 2017 and said: “The 2019 fuel bill is expected to increase by €900 million compared to 2018.”
Benjamin Smith, the new Air France-KLM chief executive who was appointed in August, described the results as “a solid performance”.
Smith reported: “Efforts to reduce unit cost helped to offset the fuel and currency headwinds.”
He noted: “The global context remains uncertain given the current geopolitical environment and rising fuel price.”
The group’s network carriers, Air France and KLM, reported a €960-million operating profit for the nine months to September.
The group’s fuel bill, including the cost of fuel hedging, in the third quarter alone hit €1.377 billion, up €229 million year on year.
The negative impact of the strong dollar against the euro was put at €88 million for the quarter.
Air France-KLM expanded capacity to and from Latin America by almost 8% this summer. Yet the group reported: “Demand out of Brazil and Argentina was weaker than expected, resulting in a 2.4% decline in unit revenue.”