15.01.06
The merger of Air France with KLM is a success. According to executive chairman Jean-Cyril Spinetta, Air France - KLM will generate record profits in 2005-6, on the back of surging passenger numbers and seat occupancy.
The success of Europe's biggest scheduled airline , born from the combination of the French and Dutch national carriers in May 2004, contrasts with the sluggish performance of Lufthansa and British Airways, its chief European rivals. 'Our seat occupancy ratio is rising faster than those of Lufthansa and British Airways, while we have targeted faster growth,' Spinetta said.
During December 2005, Air France-KLM achieved an 11.9% rise in passenger-kilometres, after a 12.2% increase in November, while the number of passengers rose 8% to 5.6m. The number of passengers flying BA in December fell 0.2% to 2.7m and those using Lufthansa increased in November by 3.6%.
The growth at Air France-KLM is driven by the addition of long-haul international routes out of Paris Charles de Gaulle and Amsterdam's Schiphol airports, which is wooing passengers from the US, Asia and Africa and the Middle-East. The company has also responded well to competition from low-cost carriers, achieving economies on short-haul routes that put its European operation back in the black during the first half.
The group is winning greater-than-expected economies of scale from the merger and the modernisation of its fleet, now completed, gives it fuel efficient aircraft just when fuel prices are at record levels. Indeed, passenger fuel surcharges are delivering extra revenue while purchase costs still benefit from hedging.
