Air France KLM on Thursday posted a stronger-than-expected 28 percent jump in second-quarter operating profit to 725 million euros and confirmed its forecasts for the 2007/08 financial year.
Batting aside recent concerns over the global economy and high oil prices,the world's largest airline by revenues said fiscal second-quarter net profit almost doubled to 736 million euros as revenues rose 5.8 percent to 6.489 billion euros.
Air France KLM said profits were boosted partly by an additional capital gain of 202 million euros on the sale of a stake in the Amadeus reservations system.
But they were also lifted by "robust global growth" that continues to underpin demand, especially on long-haul flights.
Analysts were on average expecting operating profit for the July-September quarter of 659 million euros on revenues of 6.484 billion, as well as a net profit of 447 million euros, according to Reuters Estimates.
"These are excellent results, essentially due to the strength of passenger demand, but also due to a plan of cost savings," Finance Director Philippe Calavia told journalists.
"We are not seeing any weakness in passenger demand, even with the level of fuel prices where they are today, and even with the fuel surcharges we are applying," he added.
The airline also said its financial charges fell sharply.
Air France KLM confirmed its objectives of a further rise in operating income in 2007/08 from last year's 936 million euros and a return on capital employed of 7 percent after tax for the full year, up from 6.5 percent.
"The first quarter was excellent; the second quarter was very good," Deputy Chief Executive Pierre-Henri Gourgeon said.
The Franco-Dutch airline group, formed from a 2004 merger of Air France and KLM, has said it aims to lift its return on capital to 8.5 percent by 2009-10.
It has promised its investors it will only pursue possible mergers with other European airlines if the deals protect its medium-term financial goals.
Vice Chairman Leo Van Wijk said this week Air France KLM had not yet decided whether to bid for either the struggling Italian carrier Alitalia or Spain's Iberia, both of which are looking for buyers.