# Air France-KLM beats expectations on long-haul recovery
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-02-17
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Air France-KLM surpasses profit expectations in 2021
Meta Description: Air France-KLM surpasses core profit projections due to increasing transatlantic travel and improving bookings post-Omicron restrictions ease in Europe.
URL: https://financedigest.com/air-france-klm-beats-expectations-on-long-haul-recoveryhtml

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PARIS (Reuters) -Air France-KLM beat core profit expectations for 2021 due to a recovery in transatlantic travel in the fourth quarter and said it had started to see a pickup in bookings this quarter as Omicron restrictions start to ease in Europe.

The Franco-Dutch airline group’s earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at 745 million euros ($845.65 million) for the year, beating a Refinitiv poll of analysts who had pegged the figure at 342.9 million euros, and the company’s own guidance of a “slightly” positive figure.

It was the second straight quarter of core profit since the outbreak of the pandemic. Overall, the company posted a net loss of 3.29 [billion euros](https://www.financedigest.com/mercedes-benz-to-buy-back-up-to-4-billion-euros-in-shares-by-2025.html "Mercedes-Benz to buy back up to 4 billion euros in shares by 2025"). Revenue of 14.32 billion [euros](https://www.financedigest.com/unicredit-gets-ecbs-green-light-for-second-1-billion-euro-share-buyback.html "UniCredit gets ECB’s green light for second 1 billion euro share buyback") outpaced the average estimate in a Refinitiv poll of 13.97 billion euros.

Steven Zaat, the company’s chief financial officer, said the airline increased capacity on long-haul in the fourth quarter despite a resurgence of coronavirus cases due to the Omicron variant, which hurt short- and medium-haul [travel in Europe](https://www.financedigest.com/how-to-travel-europe-on-a-budget.html "How to travel Europe on a budget").

In October, the [group had guided for fourth quarter](https://www.financedigest.com/food-group-danone-raises-2022-outlook-as-third-quarter-sales-beat-expectations.html "Food group Danone raises 2022 outlook as third-quarter sales beat expectations") total capacity of 70%-75%, and ended the period at 72% of 2019 levels.

For the first quarter of this year, the company forecasts EBITDA to break even, while the available seat kilometres for the group’s network [passenger activity is seen at 73%-78% of 2019 levels](https://www.financedigest.com/fraport-sees-2023-passenger-traffic-at-80-90-of-pre-pandemic-levels.html "Fraport sees 2023 passenger traffic at 80-90% of pre-pandemic levels"), with the quarter impacted by the Omicron variant and a slowdown of business travel as companies still predominantly exercise a work-from-home model.

Since last week, however, Zaat said bookings have started to catch up, including the summer period, as air [travel is becoming less restricted](https://www.financedigest.com/eu-to-restrict-travel-rules-for-russians-split-on-how-far-to-go.html "EU to restrict travel rules for Russians, split on how far to go").

The group, which in 2020 [received 10.4 billion](https://www.financedigest.com/petrofac-hitachi-energy-receive-14-billion-agreement-from-tennet.html "Petrofac, Hitachi Energy receive billion agreement from TenneT") euros in loans backed by France and the Netherlands – its two biggest shareholders, said it still planned to raise equity via capital increase or other instruments by up to 4 billion euros.

It has already redeemed 500 [million euros of the French state](https://www.financedigest.com/wizz-air-loses-fight-against-67-million-in-state-aid-for-romanian-rival.html "Wizz Air loses fight against million in state aid for Romanian rival") loan.

($1 = 0.8810 euros)

(Reporting by Piotr Lipinski; Editing by Sherry Jacob-Phillips)


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