Air France/KLM Show Quarterly Revenue Rise Despite Volcanic Activity - Business Travel News

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Air France/KLM Show Quarterly Revenue Rise Despite Volcanic Activity

July 28, 2010 - 12:20 PM ET

By Amon Cohen

Air France/KLM provided further evidence of the hardening of airfares globally Tuesday when it announced an 11.8 percent annual rise in revenue per passenger kilometer for the three months ending June 30. The company said a 2.3 percent growth in passenger numbers was "accompanied by a recovery in unit revenues to levels close to those of 2007-08. As a result, unit revenues per available seat kilometer were up 14.8 percent."

Trading figures released earlier this week by travel management company HRG also suggested that average ticket prices are rising, and Virgin Atlantic confirmed this trend to BTN Wednesday. AF/KL said business travel showed distinct signs of improvement over the quarter, which helps to explain the higher yields.

Total revenue for AF/KL jumped 10.7 percent to €5.72 billion, but the company said revenue growth would have been 15.7 percent if it had not been for the volcanic ash crisis, which cost it €158 million in lost earnings. Nevertheless, earnings shot up from €112 million in the same quarter last year to €484 million this time, principally because of AF/KL selling around one-quarter of its 23.1 percent stake in Amadeus when the travel technology company made an initial public offering in April.

Operating income was €132 million in the red, reduced from a deficit of €496 million last time. Again, AF/KL said this would have been a surplus of €26 million had it not been for the ash-enforced closure of European airspace in April.

AF/KL said forward bookings are strong for the current quarter, but it remains cautious about the strength of the economic recovery and worried about rising fuel prices.

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