Strikes buffet profits at Air France-KLM

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A wave of strikes battered earnings at Air France-KLM in the second quarter, but higher passenger numbers meant the group stayed in the black, it said Wednesday.

The Franco-Dutch company estimated the cost of the 15 days of strikes between February and June at 335 million euros ($391 million).

In just the second quarter, the impact of the strikes was estimated at around 260 million euros.

In spite of the dent, the group's turnover from April to June was stable at 6.6 billion euros, thanks in part to an 0.8 percent rise in passenger numbers to 26 million, according to a statement.

The group reported net profits of 109 million euros for the second quarter. That was down sharply from 593 million for the same period last year, although that figure was boosted by new accounting rules.

In the first quarter, coinciding with the cold winter months, Air France-KLM's earnings had taken a serious hit, with the company suffering a net loss of 269 million euros.

Low-cost airline Transavia helped boost the group's overall performance, with passenger numbers up 5.2 percent in the second quarter.

"The environment was better than we expected," chief financial officer and acting CEO Frederic Gagey said in a conference call with journalists.

"We were quite happy with the context of demand for air transport, with group unit revenue up 1.7 percent," driven by premium traffic performance, Gagey said.

Investors welcomed the news, sending Air France-KLM's share price soaring 6.35 percent in Wednesday mid-morning trading on the Paris stock exchange.

Air France has been hit by a major dispute, with employees of the French carrier demanding better salaries.

The strikes led to the resignation in May of group CEO Jean-Marc Janaillac. He had gambled his job on calling a vote among Air France staff on whether to accept a seven percent pay rise over four years, saying he would quit if it was rejected.

He announced his resignation on May 4 after 55 percent voted against the deal.

Janaillac's successor is expected to be named in September.

© 2018 AFP

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