KLM swung to its first full-year profit in three years on Thursday mainly due to deep cost cuts, reporting its last set of results before it is swallowed by Air France to create the world's top airline.
Air France succeeded earlier this week in its bid to become the world's biggest carrier by revenues, winning nearly 90 percent of its Dutch rival in the first cross-border merger of major airlines.
KLM posted a better-than-expected net profit of 24 million euros ($29 million) for its 2003/04 financial year versus a 416 million loss in the previous year. Operating revenues fell nine percent to 5.877 billion euros.
KLM did not provide a forecast as starting with the first quarter of the current 2004/05 financial year KLM figures will be included in Air France-KLM's results.
"The results look good from the operational side, better than many expected even after KLM raised its guidance. Not a bad way to start this combination," said Richard Brakenhoff, analyst at Kempen & Co.
The Dutch carrier said that, like its competitors, it was facing strong pressure on yields, a key measure of airline profitability based on what it earns per passenger, but was faring better because it kept its capacity relatively low.
"Because we reduced our capacity significantly we were able to play the yield game quite well," KLM Chief Executive Leo van Wijk said at a news conference.
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