Restructuring: Air France-KLM Returns to Profit

February 19, 2016

 

Air France-KLM beat forecasts with a return to profit last year, helped by a drop in the fuel bill and growth in passenger numbers, lifting its shares close to a nine-month high on Thursday, reports Reuters.

 

The carrier achieved an operating result of 816 million euros ($909 million), compared with a loss of 129 million in 2014, it said in a statement. This beat analysts' average forecast of 544 million in a Reuters poll.

 

The company cautioned, however, that pressure on ticket prices from increased competition would eat into the benefits of cheaper fuel this year, though it maintained its medium-term financial targets.

 

Air France-KLM is cutting labour costs and restructuring its network to better compete with deep-pocketed Gulf airlines and fast-growing European low-cost carriers.

 

It has been helped by plunging oil prices, although the benefit was mitigated last year by pre-existing hedging contracts.

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