Takeover allows Air France-KLM to return to profit in the third quarter – archyde

PARIS (Reuters) – Air France-KLM returned to profit at the end of the summer, exceeding its own expectations as passenger numbers nearly doubled thanks to the relaxation of travel restrictions linked to the coronavirus epidemic.

The profit before interest, taxes, depreciation and amortization (Ebitda) of the Franco-Dutch group reached 796 million euros in the third quarter, Air France-KLM said on Friday, against a loss of 442 million euros for the same period in 2020.

The number of passengers who booked flights in those three months nearly doubled year-on-year to 16.9 million.

“We had forecast a positive EBITDA, but our expectations were exceeded by 800 million euros,” Group CFO Steven Zaat told reporters.

Air France-KLM estimated that its EBITDA would be positive in the fourth quarter and “slightly” positive for the whole of 2021.

The group said it had seen a rapid upturn in bookings for the month of November and the Christmas holidays, after the United States announced in September that it would reopen its borders to fully vaccinated Europeans.

The fall reopening of Canada and Singapore also paved the way for the recovery, said Steven Zaat, although long-haul activity remains hampered by restrictions still in place in Australia, China and Japan.

The group also reduced its net debt to 8.1 billion euros at the end of September, a decrease of 2.9 billion euros compared to the end of 2020.

Air France-KLM last year received a total of 10.4 billion euros in loans guaranteed by France and the Netherlands, and has been discussing for several months a recapitalization plan to ease the debt burden resulting.

The group said it had agreed to repay 500 million euros of a loan guaranteed by the state in the coming weeks, and the remaining 3.5 billion euros in three installments between 2023 and 2025.

The group said it was considering another fundraiser under good market conditions, after a capital increase earlier in the year saw the French government more than double its stake to just under 30 %.

(Sarah Morland report; French version Camille Raynaud)