The Olympics led to a shortfall due to customers “having avoided Paris during the period”, according to the airline, which denounces “the additional expense” that new taxes would entail.
Air France-KLM's net profit contracted 13% year-on-year in the third quarter, to 824 million euros, penalized by customers who avoided Paris during the Olympic Games, the company announced on Thursday. In a press release, the Franco-Dutch group, which gave up one of its annual financial objectives after having suffered a further increase in its costs, also estimated at 280 million euros the increase in its tax bill in 2025 if the French government succeeds in its plan to tax the aviation sector more.
Even lower than the record for the same period of 2023 (946 million euros), the net profit earned during the three summer months, a crucial period for airlines based in the Northern hemisphere, allowed Air France-KLM to go green over nine months, at 510 million. This latest result, however, is 711 million behind compared to the same period of 2023, after a first half lower than expectations. Far from the martingale initially hoped for, the Olympic Games, at the end of July and beginning of August, dissuaded part of Air France's North American and Asian customers from going to Paris at the start of summer. The group had already said at the end of July that it expected a negative effect of 200 million euros on its operating profit, including 160 million in the third quarter.
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The phenomenon, very visible in July, faded in August and September, according to the company. During these three months, the group achieved a turnover up 3.7% over one year to 9 billion euros, transporting 27.85 million passengers (+3.5%), slightly below the growth of its capacities (+3.6%). This resulted in an erosion (-0.4 point) of the aircraft load factor to 89.3% and a drop in unit revenue (-1%). Ticket prices fell by 0.6%, and even by 2.8% on long-haul flights.
The operating margin suffered, nevertheless remaining strong for the airline sector at 13.1% during the quarter (-2.4 points). Over nine months, it stood at 5.1% (-2.7 points). Air France-KLM took the opportunity of its financial results to warn that the increase of one billion euros in taxation of the aviation sector provided for by the French government's 2025 finance bill would have consequences on “profitability and competitiveness” of society. 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”the increase cannot be fully passed on to ticket prices, according to the same source.
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