PARIS: Air France-KLM said Friday that it narrowed its losses substantially in the third quarter thanks to favourable summer business and the airline plans to boost capacity as countries reopen their economies from coronavirus lockdowns.

"The Air France-KLM group had a good summer season thanks to the reopening of many countries," said chief executive Benjamin Smith in a statement.

The carrier booked net loss of 192 million euros ($220 million) in the period from July through September, after posting a bottom-line loss of 1.665 billion euros in the same period a year earlier.

At an underlying level, earnings were back in the black and Air France-KLM said it booked operating profit of 132 million euros in the three-month period compared with a loss of 1.64 billion euros a year earlier.

This was largely attributable to the "strong performance" of the group's low-cost arm, Transavia, which was able to fly holidaymakers to summer destinations again after Spain, Portugal and Greece reopened their borders to tourists.

Transavia's passenger numbers were up by as much as 111 percent on a 12-month basis and the budget airline's activity levels were "back to around 85 percent of the regular production," the statement said.

At a group-wide level, including the long-haul services of Air France and KLM, the airline said it was operating at around 66 percent capacity compared with the third quarter of 2019.

Air France-KLM said it transported 16.9 million passengers overall during the July-September period, almost double the number compared with a year earlier, but still far short of the pre-pandemic levels of 29.1 million.

This was reflected in revenues, which were up 81 percent year-on-year at 4.567 billion euros in the third quarter, but down by 40 percent from the corresponding figure for 2019.

"For the first time since the beginning of this Covid-19 crisis, the third-quarter results show a positive operating result which encourages us to continue our efforts," said CEO Smith.

Nevertheless, the health crisis "is not yet over. Important continents such as Asia remain mainly closed and business travel is slowly recovering," he cautioned.

Cause for optimism was the announcement in September of the reopening of the United States for European citizens, the airline said.

"Bookings came quickly for November and even more for the Christmas holiday," it said.

The reopening of Canada early September was "another important milestone for the recovery of the group, as well as the reopening of Singapore as from October."

Prior to the pandemic, services to the US accounted for around 40 percent of Air France-KLM's long-haul revenues.

The airline lost more than 10 billion euros as a result of the coronavirus pandemic over 18 months, and had to be bailed out by the French government.

It is now planning to repay 500 million euros of its total overall state-guaranteed loans of 4.0 billion euros "in the coming weeks", said chief financial officer Steven Zaat.