October 8, 2018 / 5:40 AM / 2 months ago

Air France KLM September passenger traffic rose 2.7 percent from last year

FILE PHOTO - An Air France airplane lands at sunrise at the Charles-de-Gaulle Airport in Roissy, near Paris, France August 26, 2018. REUTERS/Christian Hartmann

PARIS (Reuters) - Air France KLM (AIRF.PA) reported on Monday a rise in passenger traffic in September, with the airline aiming to improve its business performance after strikes earlier this year cost it millions of euros and led to a management shake-up.

Air France KLM said it carried a total of 9.1 million passengers last month across the group’s various airline brands, up 2.7 percent from a year ago.

Its load factor - a measure of how full an airline’s planes are - increased 0.2 percentage points to 88.6 percent.

Canadian Benjamin Smith took over as Air France KLM’s new group chief executive last month. Smith faces the task of having to overcome union resistance to shrink the French unit’s swollen cost base while keeping increasingly frustrated Dutch staff on side.

Shares in Air France KLM were down 0.5 percent at 8.40 euros, with the stock having fallen around 40 percent so far in 2018, mainly due to the impact of those strikes.

“At first sight, the numbers look uninspiring, but decent,” said Pierre Willot, fund manager at Paris-based firm Montaigne Capital, which has a small holding in Air France KLM.

“The bright spot is Transavia, with fairly solid numbers. This low-cost subsidiary now represents 1.7 million passengers for the month compared to 9.1 million for the AF-KLM group in September. This is definitely one of the assets that could help Air France to become structurally profitable,” he added.

Strikes this spring cost the group some 350 million euros (308 million pounds) and led to the departure of Smith’s predecessor.

The French state has a 14 percent stake in Air France KLM, while Delta Airlines (DAL.N) and China Eastern Airlines (600115.SS) each hold an 8.8 percent stake in the group.

Reporting by Sudip Kar-Gupta; editing by Emelia Sithole-Matarise and Louise Heavens

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