Air France-KLM posts Q1 revenue beat driven by strong summer bookings

Air France-KLM on Friday reported better-than-expected first-quarter revenue and robust cash flow as it benefited from a global recovery in air travel and strong summer ticket sales.

The carrier’s revenue grew 42% year-on-year to 6.33 billion euros ($6.97 billion), just above the 6.30 billion euros expected on average by analysts polled by the company.

Airlines and airport operators are benefiting from a strong traffic recovery and rising travel demand, despite high inflation and an uncertain economic outlook.

Air France-KLM said it did not see an impact from the cost- of-living crisis, pointing to more than 1.5 billion euros in ticket sales over the first quarter and to a strong demand across its network.

The carrier, however, narrowed its capacity outlook for the full year 2023 to circa 95%, against its previous estimate of capacity between 95% and 100%.

The group said the reduced capacity expectations were due to workforce scarcity, especially on the pilot side, but were not connected to a lack of demand.

Since last year, strikes and staff shortages have forced European airlines to cancel thousands of flights to avoid long queues at major airports.

Air France-KLM said the impact from French air-control strikes had been limited and was in the millions of euros, which it quantified as smaller than the impact from previous strikes.

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Last month, French airport operator ADP said it lost around 470,000 passengers between January and March due to the strikes against French President Emmanuel Macron’s pension reform.

At Transavia, Air France-KLM’s low-cost unit, the operating result for the first quarter was impacted by air traffic control strikes in France and grounded aircraft in the Netherlands, as well as by higher fuel prices, the group said in a statement.

At group level, the quarterly operating loss narrowed to 304 million euros, but was wider than the loss of 282 million euros forecast on average by analysts polled by the company.