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Investing.com — Air France KLM SA (EPA:AIRF) reported better-than-expected profit in the fourth quarter, as higher ticket pricing led to record revenue that outweighed a spike in fuel costs.
Operating income for the three months to the end of December came in at €134 million (€1 = $1.0638), well above Bloomberg consensus estimates of €98.9M.
However, the figure dipped by 25% compared to the corresponding period in the prior year, due in large part to a more than doubling in aircraft fuel expenses to €2.06B.
To offset these cost pressures, the group instituted a number of fare hikes across all flights throughout 2022. These increases combined with passenger traffic that rose by nearly a third year-on-year to create revenue of €7.13B – Air France-KLM’s highest-ever top-line result in the fourth quarter.
In a statement, Chief Executive Officer Benjamin Smith said the airline successfully captured “strong demand” for travel following the lifting of most COVID-19 restrictions around the world. Smith added that Air France-KLM has “turned the page” on the pandemic, while facing simultaneous challenges from soaring inflation, airport disruptions and the war in Ukraine. He highlighted full-year net income in particular, which returned to positive territory after a loss of €3.3B in 2021.
In 2023, Air France-KLM now expects available seat kilometers – a gauge of passenger carrying capacity – to be between 95% to 100%. Analysts at Bernstein noted that this guidance points to a “near-total restoration” of capacity after levels dropped sharply during the pandemic.
Shares in Air France-KLM jumped in early European trading on Friday.
