Air France-KLM sees positive benefits on the transatlantic rebound

  • Basic earnings forecast for the fourth quarter of the fiscal year
  • Third Quarter Core Profit Turns Into Profit
  • Prompt handling of reservations when reopening in the United States
  • Reduce your debt

PARIS, October 29 (Reuters) – Air France-KLM (AIRF.PA) is expected to return to underlying profits this year, the Franco-Dutch airline group said on Friday, after a rebound in passenger bookings during the summer helped him beat his profit forecast. for the third trimester.

The group predicted “slightly” positive earnings before interest, taxes, depreciation and amortization (EBITDA) in 2021, after recording a loss of 1.7 billion euros ($ 1.98 billion) last year.

Stocks rose nearly 5% in morning trading. Analysts said the quarterly results were a positive surprise, fueled by strong demand and cost cuts.

The company aims to cut around 14,000 jobs – nearly a fifth of its workforce – in its French and Dutch branches by the end of next year.

A reopening of U.S. borders to Europeans vaccinated before the Christmas holidays helped it forecast positive EBITDA for the last three months of 2021, cementing a profit of nearly € 800 million at the end of the summer. Read more

The number of passengers booking flights in the quarter nearly doubled from 2020, but remained at around half of pre-pandemic levels.

Air France employees stand around the first Air France Airbus A220 during a ceremony in the Air France hangar at Paris Charles de Gaulle airport in Roissy near Paris, France, September 29, 2021. REUTERS / Gonzalo Fuentes

CFO Steven Zaat said the results were a “very good signal for the fourth quarter, where we are seeing stronger bookings every week.”

The airline estimated its capacity to reach 70-75% of 2019 levels in the last quarter, but has not given guidance for 2022 due to uncertainty over reopenings in China and Japan.

The rebound enabled Air France-KLM to reduce its net debt to 8.1 billion euros at the end of September, down 2.9 billion euros compared to the end of 2020.

Last year, the group received 10.4 billion euros in loans backed by France and the Netherlands – its two main shareholders – and has been discussing for months a recapitalization plan to reduce its debts.

He pledged to repay 500 million euros of a state guaranteed loan in the coming weeks, and the remaining 3.5 billion euros in three installments between 2023 and 2025.

The company is also considering another capital increase under good market conditions, six months after a capital increase saw the French government more than double its stake to just under 30%. Read more

($ 1 = 0.8576 euros)

Reporting by Sarah Morland, editing by Silvia Aloisi and Barbara Lewis

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