Air France-KLM wants to be an important part of the consolidation of airlines outside of Europe.
This is not new and we are definitely in the evolution of the company in some way. Air France KLM CEO Ben Smith said during the third-quarter results presentation that there is nothing to stop them from having a commercial partnership.
We are second to Brazil. The CEO stated that the market is very important for them.
Portuguese Infrastructure and Housing Minister Pedro NunoSantos said in December of 2016 that TAP could be partially privatised.
Smith said that Air France KLM is interested in Air Europe, which is based in Madrid Barajas.
The International Airlines Group wants to increase its presence at Madrid and is focused on AirEuropa. In order to strengthen its leadership in Latin America, IAG converted the loan it gave to AirEuropa into a 20% stake.
Smith said that there is an exclusive place for the group until the end of October. Certares is a private equity firm that leads a group of airlines. He said that they do this with Delta.
“Italy has always been difficult. We are also studying other consolidation (possibilities) in Europe and somewhere else“.
Ben Smith, Air France-KLM Group CEO
There are many opportunities for organic growth at Air France-Klem. Growth activities are very attractive in the Indian Ocean. Smith said that they were in a unique position when it came to consolidation.
Smith said that Air France-KLM was able to take advantage of the strong travel demand during Q3. The group reported a 12% increase in adjusted operating free cash flow. The group's net income for the quarter was over half a billion dollars. Positive operating results are expected for the full year. Steven Zaat said it was quite an achievement.
The North Atlantic is one of the key markets. Load factors in the North America flights increased. Zaat said there is a high willingness to travel to the United States.
One important fact on the North Atlantic was the fact that Norwegian has no Boeing 787-9s in Paris Charles de Gaulle.
“This has been eight or nine aircraft. That helped us and I don't see that they come back. We don't have that kind of competition at CDG (anymore)“.
Ben Smith, Air France-KLM Group CEO
The CEO made it clear that the main assets of the company were the Amsterdam Schipol hub and the French market. Smith said that this gave them a huge advantage. The airport situation in Amsterdam is a threat to us. Stakeholders are expected to improve the level of service and solve the problem quickly. Smith made a statement.
Due to the capacity ban on departing passengers at Schiphol, Air France-KLM's overall capacity is reduced to around 85%. In Amsterdam, this is not acceptable. Smith said that the capacity reduction created stability.
CFO Zaat said he expects on-time deliveries of the A320, A321, and A350 fleets. The CFO said there were no delivery delays.
Air France, along with its regional arm HOP, has 259 aircraft in operation, while the other two airlines have 100 aircraft.
According to the Aviation Week fleet Intelligence network, Air France KLM has an order for 48 A220-300, 19 A350-900, four A350F, 13 Embraer 195.E2, and eight Boeing 787-9.
Smits said that the environment is still challenging.
“We need to continue transforming and there is limited visibility on the impact of the upcoming potential macroeconomic slowdown“.
Ben Smith, Air France-KLM Group CEO
Flight capacity is set to increase in the first quarter of next year due to high demand. CFO Zaat said that one third of the tickets had been sold.
We sold 75% of our capacity in the fourth quarter. He said that they still see a good yield environment for the winter.
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