Air France-KLM (OTCPK:AFRAF) stock slumped on Friday after the company warned capacity will remain well below pre-pandemic levels despite robust demand into year-end.
For the third quarter, the Franco-Dutch airline group notched €460M in net income alongside a nearly 80% jump in revenue from the prior year to €8.11B. Additionally, the airline managed to reduce net debt by €2.3bn and bring group capacity to 89% of 2019 levels.
“While the situation remains unsatisfactory in some key airports-, notably impacting KLM at its Amsterdam Schiphol hub, we saw significant improvements following the operational challenges that had erupted earlier this year,” CEO Benjamin Smith said. “The Group posted a strong operating result in spite of rising fuel costs and inflation, and the Group remains confident in its ability to further increase capacity during the Winter season.”
However, the capacity estimate for the fourth quarter is now expected to trend at about 85% of 2019 levels, reeled in from the prior expectation of 85-90%. As such, full-year capacity is expected to remain at 80% of pre-pandemic levels, with a path to hit 90% only by the close of the first quarter of 2023.
Paris-listed shares of the airline group tumbled 13.05% on Friday after seeing significantly elevated trading volume.
Examine the airline’s income statement.
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