Air France ‘turns page’ on Covid, sees higher profit this year

Bloomberg

Air France-KLM said it has “turned the page” on the coronavirus pandemic that prompted an unprecedented industry slump and forced a government bailout, predicting that it will exit state aid this year and return to full passenger capacity by the end of 2023.
The airline group reported net income of €504 million ($528 million) in the fourth quarter, compared with a loss in the same period last year, according to a statement. Revenue reached about €7.1 billion — a record — from €4.8 billion a year earlier.
The carrier said its medium-term ambition is to reach an operating margin of 7% to 8%, up from just 1.9% in the fourth quarter amid surging fuel prices and disruptions at the Amsterdam hub.
“We close out the year with a positive net income, having turned the page on Covid, and look to the future with confidence in our ability to address the challenges ahead,” Chief Executive Officer Ben Smith said in the release.
Underscoring the airline’s recovery drive, Air France said it wants to fully exit the remaining state aid program by the middle of April, giving it more flexibility to resume its growth path, including possible acquisitions.
The airline said it will continue to invest in its fleet this year, and will take delivery of new Airbus SE single-aisle aircraft in the course of 2023.
Air France rose as much as 4% to €1.74 in Paris, the biggest gain in more than a week.
The global aviation industry has enjoyed a robust comeback since most countries lifted their coronavirus restrictions and people resumed travel for business and leisure.
Airbus said that it’s increasing the rate of production on its largest aircraft to meet rebounding long-haul demand, and budget carriers like Ryanair Holdings Plc have said that summer bookings point to a robust summer season.
The Dutch KLM arm was held back last year by massive disruptions at the Amsterdam hub, as the surge in travel proved too much for airlines and ground personnel to handle. As a result, the airport instituted capacity restrictions that weighed on the division’s results in the fourth quarter.
Amsterdam Schiphol said that it had a loss of €28 million last year despite what it called a strong recovery in traffic, and the hub’s efforts to mitigate the chaos led to additional costs of about €120 million, it said.