Air France-KLM reports first profit since 2010

Shares in Air France-KLM soared to a nine-year high yesterday, on the back of Europe’s largest airline group reporting its first annual profit since 2010.

A near 7% drop in fuel costs and a 3% rise in passenger numbers to 89.8m helped turn 2014’s €129m operating loss into an €816m operating profit for 2015.

That easily beat analyst estimates for a profit of €544m.

Group revenue amounted to €26.1bn, but management estimated a €120m negative impact on revenues from the November Paris terrorist attacks.

The group also cautioned however, that pressure on ticket prices from increased competition would eat into the benefits of cheaper fuel this year, though it kept its medium-term financial targets.

“The global context in 2016 remains highly uncertain regarding fuel prices, the continuation of the over-capacity situation on several markets, and the geopolitical and economic context in which we operate.

"The group expects the expected savings on the fuel bill to be significantly offset by unit revenue pressure and negative currency impacts,” the airline said.

Air France-KLM also said it lowered its net debt to €4.3bn at the end of December, from €5.4bn a year earlier and pledged a “further significant reduction” this year.