KLM financial result, third quarter 2016
Thanks to the concerted efforts of all KLM employees, the cost-cutting measures continued to bear fruit in the third quarter. This generated a unit cost reduction of -1.4%, even taking account of the improved profit-sharing scheme for cockpit and grounds crew established on the basis of the last collective labour agreements. Lowering our costs in order to make investments is an essential part of Perform 2020.
However the results were negatively impacted by diminishing unit revenues as a consequence of increasing competitive pressure. In this context, the decreasing unit revenues outweighed the benefits achieved due to the lower fuel price. Moving forward, this will bring increasing pressure to bear on our income. Combined with major investments into our fleet, product and digitalisation for customers and staff, this serves to illustrate the unrelenting necessity of further, structural cost cuts in line with our objectives.
KLM booked an operating income of +€628 million (COI margin 8.5%) for the first nine months of this year. This represents an improvement of €283 million in comparison with the same period last year. This significant improvement can be largely attributed to the positive results achieved in the first half of the year, where fuel savings could for the most part be reflected in the results.
KLM President & CEO
(*) in the download section you will find the Air France-KLM Financial Year 2016: Third Quarter results.