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.