Air France-KLM Tempers Capacity Outlook Despite Q3 Core Earnings Beat

By Scott Kanowsky

Investing.com -- Air France-KLM (EPA:AIRF) has warned that capacity will come in at the lower end of its previous guidance range in the fourth quarter despite expected resilience in passenger demand this winter.

The Franco-Dutch airline predicted that passenger capacity in available seat kilometers will be around 85% of 2019 levels in its final three months of the year, down from its prior estimated band of 85-90%.

Annual capacity is also seen at about 80% of pre-pandemic figures and 90% in the first quarter of next year.

Paris-listed shares in the company slid sharply in early afternoon trading on Friday.

However, Air France said it is confident that capacity will continue to recover. It added that yields - a measure of revenue received per mile flown by a paying passenger - will "remain healthy" over the winter travel season.

As a result, the firm, which also unveiled third quarter core earnings and revenue that beat consensus expectations, now plans to deliver full-year operating profit of "above 900M euros."

In a note to clients, analysts at Stifel praised Air France's recent operational performance, but flagged risks to both the group and the wider European airline sector next year from soaring cost inflation and a potential waning in post-COVID travel demand.