Record profit for Air France-KLM and British Airways-owner IAG

Air France-KLM reported an operating profit of €1.34 billion for the July to September period, according to data released on Friday.

This marks a 31% year-on-year increase but remains 2% below analysts’ consensus forecast.

IAG, which owns British Airways, Ireland’s Aer Lingus, and Spain’s Iberia, fared slightly better.

It beat analysts’ expectations with a third quarter operating profit of around €1.75 billion.

This is a 43% increase in third-quarter operating profit before exceptional items.

Higher ticket prices and an increase in passengers helped to drive up these profits, but shares nonetheless fell for both IAG and Air France-KLM.

On Friday, shares in Air France-KLM dropped by as much as 8% to an all-time low, and IAG shares decreased by around 3%.

Rising fuel costs are partially to blame, but investors are also concerned about longer-term demand as consumers are hit by inflation and high mortgage costs.

In the case of Air France-KLM, experts say shareholders are also nervous due to a lack of revenue guidance for the year, and the company’s failure to meet profit targets.

Air France-KLM has left its guidance for capacity, capital spending and unit costs unchanged for the full financial year.

Speaking of the French market, the company has said that it doesn’t expect capacity to return to pre-pandemic levels, and earlier this month, it said it would stop operating most domestic flights from Paris-Orly airport by summer 2026.

This comes amid falling demand for domestic business flights and a growing shift to rail travel.