Air France-KLM Beats Profit Forecast Amid KLM Restructuring

Air France-KLM reported a third-quarter operating profit of €1.34 billion, surpassing analyst expectations of €1.1 billion. The group attributed the performance to strong demand for premium offerings and non-stop flights to India and Asia. However, the company lowered its 2026 capacity growth forecast to 2% and raised its projected annual fuel costs to $9.2 billion.

To combat rising fuel expenses and a cost-of-living crisis affecting passenger demand, the group is deepening an overhaul of its Dutch subsidiary, KLM. The reorganization includes simplifying the European fleet by phasing out older aircraft to optimize the balance of plane sizes and ages. These operational changes aim to help KLM achieve a long-term margin target exceeding 8%.

As part of this restructuring, KLM will reduce its workforce by approximately 1,000 positions, representing nearly 15% of affected roles. Leadership at the subsidiary stated that improving annual earnings by €1 billion is essential to the company's strategy.