Air France-KLM swung to a modest operating profit in its fiscal first quarter from a steep year-earlier loss, excluding the impact of an Icelandic volcanic, eruption due to a strong recovery in cargo and higher passenger figures.
The cargo unit at Europe’s biggest airline booked an operating profit of $14.3 million against a $256 million loss in the quarter ending June 30 a year ago, and freight revenue surged 42.3 percent to just more than $1 billion.
That helped Air France-KLM post a $33.8 million operating profit in fiscal quarter against a $645 million loss in the same period in 2009 as revenue climbed 10.7 percent to $7.4 billion.
The Franco-Dutch carrier posted net income of $957 million as a $1.3 billion gain from the sale of a stake in the Amadeus reservation system helped reverse a year-earlier loss of $554 million.
By the Numbers:
European Airlines' Freight Traffic
The five-day closure of European air space in April following the Icelandic volcano eruption cost the carrier an estimated $205 million as it grounded thousands of its flights and resulted in an overall operating loss of $172 million for the quarter.
Cargo would have generated income of $18.2 million without the closure of European air space.
Freight volume increased by 2.6 percent on a 6.8 percent reduction in capacity, which powered a 6.4 percentage points improvement in the load factor to 69.6 percent.
The operating margin, measured by unit revenue per metric ton of cargo flown one kilometer, soared 54.1 percent from a year ago.
The carrier idled six of its 15 Boeing 747-400 freighters during the quarter but kept its two Boeing 777 cargo aircraft and seven MD-11 freighters in the air.
Passenger losses narrowed to $184.6 million from $439 million, but the business would have booked a slim $3.9 million profit without the Iceland volcano eruption.
Air France-KLM said in view of the quicker than expected turnaround in the cargo business it is targeting break even at the operating level for the fiscal year ending March 31, 2011.
--Contact Bruce Barnard at firstname.lastname@example.org.