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Air France-KLM will continue to invest in new-generation aircraft after swinging to a profit and booking record revenue in the fourth quarter amid a surge in demand for air travel after years of restrictions and border closures.
The Franco-Dutch carrier group
AF,
on Friday posted a net profit of 496 million euros ($529.3 million) compared with a EUR126 million loss in the fourth quarter of 2021. For the year, the company reported a profit of EUR728 million compared with a EUR3.29 billion loss in 2021.
“In spite of the Omicron strain, the war in Ukraine, the inflationary situation and the operational disruptions at major international airports last summer, our group and its airlines were able to successfully capture a strong demand for travel,” Chief Executive Benjamin Smith said.
The company added one aircraft to its long-haul fleet last year. It also phased out old-generation aircraft, reducing its medium-haul fleet by seven aircraft and its regional fleet by nine. The group said it would continue to invest in new-generation aircraft this year and beyond.
Travel restrictions and border closures brought international traffic to a near standstill at the height of the pandemic. Now, airlines are scrambling for planes to expand capacity to meet surging demand for international air travel.
The group’s quarterly operating income, a closely watched metric by analysts and investors, slipped to EUR134 million from EUR179 million, generating a 1.9% margin. Quarterly revenue surged 47% to EUR7.13 billion.
Air France-KLM was expected to post a net loss of EUR57 million, operating income of EUR102 million and revenue of EUR6.89 billion for the fourth quarter, according to a company-provided consensus that gathered estimates from 18 analysts.
For the current quarter, the group is targeting 90% to 95% capacity in available seat kilometers. For the year as a whole, it expects 95% to 100% capacity, reaching 2019 levels from 2024.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
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