(Refiles to fix typographical error in headline)
By Joanna Plucinska
LONDON (Reuters) -Air France-KLM reported third-quarter results in line with expectations and confirmed its 2025 outlook on Thursday, despite some expense increases and costly challenges for its Dutch subsidiary KLM.
The third quarter is usually the strongest period for European airlines as it covers the lucrative and busy summer travel season.
However, European airlines have been under pressure as travel from Europe to the United States has dropped under U.S. President Donald Trump, whose policies are perceived by many abroad as anti-foreigner and anti-trade.
The airline group reported an operating profit of 1.20 billion euros ($1.40 billion), compared to 1.27 billion euros ($1.48 billion) projected by analysts polled by LSEG. That was significantly up from its operating profit for the same quarter last year of 732 million euros, when the group took a substantial hit tied to the Paris Olympics.
“During the third quarter, Air France–KLM once again demonstrated its resilience in a challenging environment. We maintained solid revenue growth and a stable operating margin,” Chief Executive Ben Smith said in a statement.
Air France-KLM’s operating margin for Q3 came in at 13.1%, slightly down from the same time last year.
CAPACITY GROWTH AMID BOOKING CHALLENGES
Capacity is set to increase in 2025 between 4 to 5% compared to last year, the group said, despite ongoing challenges and somewhat flagging bookings at budget carrier Transavia this summer, which the group blamed on higher airport taxes at Amsterdam’s Schiphol airport resulting in higher ticket fares.
Still, the group benefited in particular from lower fuel costs and solid bookings in its more luxurious premium cabins, but saw continued pressure on yields in its economy cabin when it came to travel to the United States.
KLM in particular was impacted by lower yields in its economy cabin, as well as costly labour disputes in September. Costs tied to maintenance and other services also rose, meaning Air France-KLM saw a marginal increase in its debt compared to last year.
($1 = 0.8575 euros)
(Reporting by Joanna Plucinska; Editing by Cynthia Osterman and Louise Heavens)
