Air France-KLM suffered from the Paris Olympics. The airline recorded a solid profit during the summer, but it could have been even better according to the group if part of its traditional customers had not been scared away by the Paris Olympic Games. The Franco-Dutch company had already warned in July that the great world sports festival would cause it a shortfall of 200 million eurosincluding 160 million in the third quarter, the fault of a strategy “avoidance” from Paris by certain travelers, put off by the crowds and the price increases.
Ultimately, its net profit collapsed to 824 million euros during the period from July to September, 13% lower than the historic figure obtained a year earlier (946 million euros), the company detailed on Thursday in a press release. The commercial depression linked to the Olympics, very visible in July, faded in August and September, assured the company, reporting solid reservations for the coming months.
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Price increase from January 1
In the third quarter, the group achieved a turnover increase of 3.7% over one yearat 9 billion euros, carrying 27.85 million passengers (+3.5%), slightly below the growth in its capacities (+3.6%). Reflecting a trend already visible at the start of summer, ticket prices are trending downward, which has weighed on the group's profitability. The latter also wants to curb the increase in its costs, linked in particular to shortages of parts and labor as well as salary increases, a phenomenon which mainly concerns KLM where a savings plan was launched at the beginning of October .
Air France-KLM took the opportunity of the publication of its financial results to warn that the increase of one billion euros in the taxation of the air sector provided for by the French government's 2025 finance bill would also have consequences on “profitability and competitiveness” of the company. This measure could result in 2025 in a “increase of 280 million euros in the level of taxation” of the group, and would have a “negative impact of 90 to 170 million euros on operating income”. Indeed, the increase cannot be fully passed on to ticket prices, according to the group, even if Air France-KLM anticipated it by increasing its prices for flights operated from January 1.
