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Monday, August 8, 2022

As premium demand returns, Air France-KLM anticipates a profitable summer

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After announcing the better-than-expected first-quarter performance, Air France-KLM is anticipating a robust summer.

The Franco-Dutch airline group earned €221 million ($234 million) in the first three months of 2022, compared to a deficit of €628 million ($665 million) the previous year.

“The performance of the Air France-KLM Group over the first quarter of 2022 confirms that recovery is here,” commented Chief Executive Benjamin Smith. “In spite of a challenging context, with the continued effect of the Omicron variant, the situation in Ukraine and the sharp increase of fuel prices, the Group posted once again a positive EBITDA and recorded strong bookings for the following quarters.”

Smith described March as “quite optimistic,” noting that demand for corporate and premium tickets had increased, adding to the recovery in leisure reservations.

In March, Air France-KLM made an operational profit of almost €30 million ($32 million), with 80 percent capacity in both premium and economy classes.

“This paves the way for a successful summer season in all our activities, which we continue to strengthen through our extensive transformation plan,” he said.

During the peak summer months, Air France-KLM aims to fly approximately 85-90 percent of its pre-pandemic capacity. It predicts that yields, a measure of ticket pricing, will be higher than in 2019.

The company intends to break even in the second quarter and have a “substantially positive” operating result in the crucial third quarter. The first quarter’s operating performance was a loss of €350 million ($371 million).

The carrier said it was still examining ways to improve its balance sheet, such as refinancing some assets and raising funds. The cost of these measures could be as much as €4 billion ($4.2 billion).

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