(RTTNews) - Shares of Air France-KLM Group (AFRAF.PK) were losing around 5 percent in Paris trading after the airline reported weak profit in its third quarter, despite increased revenues. Looking ahead, the company projects fourth-quarter network passenger unit revenue at constant currency to be slightly down.
In the Passenger network, the company said it will pursue initiatives to reduce unit costs, with a targeted 2019 reduction of between 1 percent and zero at constant currency and fuel price. The company expects October 2019 load factor to remain stable compared to last year
For fiscal 2019, the fuel bill is expected to increase by 600 million euros compared to 2018 to 5.5 billion euros. Further, the company plans capital expenditure of 3.3 billion euros for 2019, slightly higher compared to the previous guidance.
For the third quarter, net income was 366 million euros, down 53.4 percent from last year. The results were impacted by a stronger dollar end of September and Airbus A380 phase-out financial impact of 100 million euros.
Operating result fell 15.5 percent from last year to 900 million euros, hurt by trading environment and fuel bill increase. Operating margin was 11.7 percent, down 2.4 percent from the previous year. EBITDA dropped 7 percent to 1.65 billion euros.
Both Air France and KLM were impacted by lower unit revenues and rise in fuel costs. In the quarter, the fuel bill including hedging amounted to 1.51 billion euros, up 135 million euros from last year.
Third-quarter sales, however, grew 2 percent from last year to 7.70 billion euros. On a constant currency basis, sales edged up 0.8 percent.
Capacity increased 2.3 percent to 90.32 billion ASKs, and traffic increased 2.6 percent to 81.43 billion RPKs.
Passenger growth was 2.1 percent to 29.12 million passengers, and load factor rose 0.2 percentage point. Passenger unit revenue was slightly down by 0.6 percent as a consequence of the macro-economic context.
In Network, revenues decreased by -0.7 percent at constant currency to 6.5 billion euros, mostly softer passenger demand and cargo industry pressure. In the passenger network, total passenger revenue edged up 0.3 percent to 5.95 billion euros.
In Paris, Air France-KLM shares were trading at 10.26 euros, down 4.91 percent.
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