Air France-KLM Reports Declining Q3 Profit

KLM Royal Dutch Airlines reported a decline in operating profit for Q3 2024, reaching €396 million, significantly lower than the previous year due to rising costs associated with equipment, staffing, and airport charges. This downturn is reflected in the overall Air France-KLM group's operating profit of €1.18 billion, which fell short of analyst expectations by €162 million, impacted by costs related to the Paris Olympic Games and a one-time staff bonus. Despite a slight increase in revenue to €8.98 billion, the group faces challenges including rising unit costs and adverse operational conditions. As a response, KLM is implementing measures to improve financial performance, including enhanced productivity and strategic options for KLM Catering Services. The stock of Air France-KLM has suffered, dropping over 10% recently, partly due to a downgrade by Morgan Stanley, which cited concerns over free cash flow amidst a competitive environment. Analysts predict a potential operating profit of around €1.48 billion for the group moving forward, indicating a mixed outlook.