October 29, 2015 / 6:20 AM / in 2 years

Air France-KLM Q3 profit up, cost cut target reduced

PARIS, Oct 29 (Reuters) - Air France-KLM posted a sharper-than-expected increase in third-quarter profits on Thursday, but warned unions that the gains from improved demand over the summer would not remove the “overwhelming need” for cost cuts to keep pace with rivals.

With the year-earlier quarter hit by a pilot strike, the Franco-Dutch airline group turned in operating profit that almost quadrupled to 898 million euros ($982.05 million) on revenues that grew 10.8 percent to 7.415 billion euros.

That compared with average analyst forecasts of 694 million and 7.236 billion respectively.

But after failing to strike a productivity deal in recent stormy negotiations with pilots, Air France-KLM lowered its forecast for unit cost savings in 2015 to 0.5-0.7 percent from 1-1.3 percent and urged unions to resume stalled talks on the subject. It continued to predict a 1 billion euro drop in debt in 2015 to 4.4 billion. ($1 = 0.9144 euros) (Reporting by Cyril Altmeyer, Tim Hepher; Editing by Andrew Callus)

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