Following a resurgence in passenger reservations during the summer which helped the Franco-Dutch airline company to outperform profitability estimates for the third quarter, Air France-KLM said on Friday that it expects to return to core profit this year.
After a 1.7 billion euro ($1.98 billion) deficit last year, the company expects "slightly" positive earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2021.
Stocks of the company were up by 5 per cent following the earnings report by the company.
According to analysts, the estimate beating quarterly results of the company was a pleasant surprise, which was made possible because of solid demand and cost reductions.
By the end of next year, the company also targets to reduce about 14,000 employees, or about a fifth of its staff, across its French and Dutch operations.
The airline forecast a positive EBITDA for the last three months of 2021, confirming a profit of about 800 million euros during the late summer, thanks to the reopening of US borders to vaccinated European passengers before the Christmas holidays.
Over the quarter, the number of travelers booking tickets nearly doubled compared to the same period of 2020 but remained less than half of pre-pandemic levels.
The results were a "very good signal for the fourth quarter, where we see stronger bookings every week," said the airline’s Finance chief Steven Zaat.
According to the estimates of the airline, its capacity would reach 70 per cent to 75 per cent of 2019 levels in the fourth quarter. The company however did not provide a forecast for 2022 due to the uncertainties surrounding reopenings of travel routes to China and Japan.
By the end of September, Air France-KLM has reduced its net debt to 8.1 billion euros, down 2.9 billion euros from the end of 2020, thanks to the rebound in business.
10.4 billion euros in loans from its two largest shareholders, France and the Netherlands, was received by the company last year and has been discussing a recapitalization plan to reduce debts for months.
The company has also promised to repay a 500 million euros in a loan that it had taken from organizations backed by the governments in the coming weeks, while it plans to repay the remaining 3.5 billion euros in three installments between 2023 and 2025.
Depending on the conditions of the financial market, the company is also reportedly considering mulling another rights issue offering. The French government had increased its share in the company to more than double top just under 30 per cent through an equity increase just six months ago.
(Source:www.reuters.com)
After a 1.7 billion euro ($1.98 billion) deficit last year, the company expects "slightly" positive earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2021.
Stocks of the company were up by 5 per cent following the earnings report by the company.
According to analysts, the estimate beating quarterly results of the company was a pleasant surprise, which was made possible because of solid demand and cost reductions.
By the end of next year, the company also targets to reduce about 14,000 employees, or about a fifth of its staff, across its French and Dutch operations.
The airline forecast a positive EBITDA for the last three months of 2021, confirming a profit of about 800 million euros during the late summer, thanks to the reopening of US borders to vaccinated European passengers before the Christmas holidays.
Over the quarter, the number of travelers booking tickets nearly doubled compared to the same period of 2020 but remained less than half of pre-pandemic levels.
The results were a "very good signal for the fourth quarter, where we see stronger bookings every week," said the airline’s Finance chief Steven Zaat.
According to the estimates of the airline, its capacity would reach 70 per cent to 75 per cent of 2019 levels in the fourth quarter. The company however did not provide a forecast for 2022 due to the uncertainties surrounding reopenings of travel routes to China and Japan.
By the end of September, Air France-KLM has reduced its net debt to 8.1 billion euros, down 2.9 billion euros from the end of 2020, thanks to the rebound in business.
10.4 billion euros in loans from its two largest shareholders, France and the Netherlands, was received by the company last year and has been discussing a recapitalization plan to reduce debts for months.
The company has also promised to repay a 500 million euros in a loan that it had taken from organizations backed by the governments in the coming weeks, while it plans to repay the remaining 3.5 billion euros in three installments between 2023 and 2025.
Depending on the conditions of the financial market, the company is also reportedly considering mulling another rights issue offering. The French government had increased its share in the company to more than double top just under 30 per cent through an equity increase just six months ago.
(Source:www.reuters.com)
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