AIR France...que sé que te gustan las francesas...
(vamos que están soltando papelitos en aerolíneas)
* 3Q results less than expected — Operating profit of €81m (1.4% margin) was lower than our €193m (3.2% margin) and consensus €164m (source: AF-KLM), but a significant improvement over last year’s loss of €497m (-9.9%). Net loss was €45m (-€0.16/share) vs. an expected profit of €90m (€0.26/share) and consensus of €60m profit (€0.21/share).
One-off FX/derivative non-cash losses were €73m. * Lost revenue due to disruptions the main reason — Revenue was c. €170m less than expected, almost entirely due to the passenger division. This division made EBIT of only €18m vs. €105m expected. Unit revenue (RASK) rose by only 11% vs. +16% expected. Lost contribution from snow in Europe/US, ATC strikes in France/Spain, and social/political tensions in West/Central Africa came to €100m. In the Europe/N.Africa region, RASK rose by only 4.8% vs. +11% expected (with yield down 1.4%), while RASK in M.East/Africa rose by 7.5% vs. +16% expected. * Not all bad news — (i) Long-haul routes remained strong, with RASK up 25% on Asian routes, up 21% on North/South Atlantic and up 8% on Caribbean/Indian Ocean, better than expected; (ii) Cargo revenue strength continued, with unit revenue up 22% vs. 16% expected, resulting in revenue being €40m higher than expected; (iii) Operating expenses were c.€60m lower than expected, with unit cost ex-fuel/FX down 0.6%; (iv) Maintenance division was strong with an EBIT of €36m vs. €25m expected and only €12m a year ago. * FY11 outlook lowered, over-capacity the main concern — FY operating profit guidance has been lowered from over €300m to less than €300m, although still expected to be positive. With our expected unchanged 4Q loss of €273m, FY operating profit would be c.€250m. Disruption costs, higher fuel costs and social tension impacts are perfectly understandable.
But the company’s mention of ‘over-capacity’ in Jan/Feb is a concern for the sector, even though forward bookings from mid-March are ‘good quality’. The toning down of AF-KLM’s language of late has been noticeable, but underlying air travel demand would appear strong