 [ ] 2011-05-21 |
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Air France-KLM now back to full-year operating profit |
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PARIS (Reuters) – An air travel recovery and cost cutting at Europe's largest airline by revenue lifted Air France-KLM back to a full-year operating profit, with its bottom line also boosted by a unit's share flotation.
The Franco-Dutch group posted a 2010/11 operating profit of 122 million euros ($174 million) on Thursday after a 1.4 billion euro turnaround in core earnings since the previous gloom-laden financial year.
Revenue rose 12.5 percent to 23.62 billion euros.
Air France-KLM said it was ''confident'' in its ability to improve operating income in 2011/12 but was also focused on reducing its 85 percent debt-to-equity ratio, prompting it to skip its dividend for the financial year to end-March.
International Airlines Group, formed by the merger of BA and Iberia, said this month it expected significant growth in operating profit this year as a continuing recovery in travel helps unit revenue and costs.
Like most airlines navigating through an economic recovery hampered by political instability and volatile oil prices, Air France-KLM expressed uncertainty about the Middle East and the aftermath of the Japan earthquake, as well as its fuel bill.
The various crises in the past few months shaved half a percentage point off its unit revenue in the fourth quarter.
''The oil price is very difficult for the world economy and air transport feels the effects more quickly than most,'' said Pierre-Henri Gourgeon, whose mandate as chief executive was renewed by the airline group's board.
''We have reduced our costs and improved performance and are much better positioned to face these uncertainties than before.''
Fuel costs rose by 186 million euros to 1.43 billion in the fourth quarter ended March 31.
Full-year net profit of 613 million euros was boosted by a 1 billion gain from a revaluation of the company's 15 percent stake in the Amadeus reservations system, which is now listed. |
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