Air France-KLM Group announced its first annual operating profit since 2010, beating analyst estimates as fuel costs fell and terrorist attacks in Paris failed to hold back fourth-quarter earnings.
It said a pay deal with pilots is still crucial to remain competitive when the oil price rises again.
Shares of Europe’s biggest carrier rose the most in five months after it posted earnings before interest and tax of €816 million for 2015, compared with a year- earlier loss of €129 millio. Analysts had predicted a figure of €706 millio, the average of 10 estimates.
The company’s main Air France arm is struggling to secure a permanent reduction in staff expenses after efforts to push through a deal last year led to violent protests. Chief executive officer Alexandre de Juniac says that without an accord it will be impossible to compete with discount carriers such as EasyJet Plc in Europe and fast-growing Gulf rivals on long-haul routes.
“In spite of the favorable environment created by lower fuel prices, we will not reduce our ambition to improve our competitive position while economic and geopolitical uncertainties remain high,” the CEO said on a conference call.
Shares of Air France rose as much as 7.3 per cent to €7.99, the most since 3 September, before trading 6.3 per cent higher at €7.92 as of 8.12 a.m. in Paris. The stock has added 12 per cent this year.
Bloomberg News, edited by Hospitality Ireland
