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Air France-KLM reports earnings fall
POSTED: 8:56 a.m. EDT, May 30,2007
Air France-KLM has reported that operating income increased 32.5 per cent during the 2006-07 financial year to EUR1.24 billion (US$1.67 billion).
Revenue also increased by 7.6 per cent over the previous year despite a negative currency impact of 0.8 per cent, rising to EUR23.07 billion. The adjusted operating margin rose 0.9 points to 6.3 per cent while return on capital was seven per cent, including a pre-tax gain on Amadeus of EUR504 million.
But the cargo business suffered a sharp decline with operating income amounting to EUR62 million, down from the EUR166 million earned in previous year, representing a decrease of 62.7 per cent over the previous financial year. This, despite cargo revenue being up 0.9 per cent year on year to EUR2.91 billion and the group carrying 1.5 million tonnes of cargo, an increase of 2.1 per cent.
The fall in earnings was blamed on increased competition both from other air carriers and from shipping, a strong euro which reduced exports to Asia and the high cost of fuel.
On a constant currency basis, unit revenue per tonne kilometre (RRTK) rose 0.9 per cent and unit revenue per available tonne kilometre (RATK) by 1.8 per cent, indicating that the main factor behind the lower cargo earnings was the impact of the stronger euro.
"This past year has demonstrated the benefits of our profitable growth strategy. We have taken advantage of global growth to develop our business in all major markets and increase our profitability through cost control while continuing to invest in our future," said chairman Jean-Cyril Spinetta.
Operating income grew by 55.5 per cent to EUR1.07 billion on the back of a 5.4 per cent increase in traffic and 4.4 per cent increase in capacity. The load factor reached 81.4 per cent, up 0.6 points. |
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