Air France-KLM Group’s new CE says it’s time the carrier’s French and Dutch arms began behaving like a single company -- 14 years after they formally merged. Ben Smith, who started last month, used his first formal call with analysts to make clear he wants the units to resolve tensions over labour strife and unequal levels of profitability and build a business as tight as merged rivals that came together far later. “The more we can do to optimise and do what most major groups do when they consolidate, that’s obviously our goal,” the former Air Canada executive said. “Any internal struggles should be addressed as quickly as possible.” The combination, which Smith called a “unique set up,” dates from Air France’s 2004 takeover of KLM. The two still operate as separate entities, unlike merged airlines in North America. <br/>
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Air France-KLM’s run of good news has continued with a strong set of Q3 results, showing pre-tax profit up 7.3% to E915m in the 3 months to the end of September. After securing a new CE and a wage deal with the majority of its unions in recent months, AF-KLM beat analysts’ consensus for revenue at E7.55b, up 5.8%t at constant currency and operating profit of E1.07b, 11% above consensus. The quarter’s numbers could not entirely rescue the company’s results for the year to date, badly affected by strikes which cost it E335m in the first half. In the first 9 months, pre-tax profit was down 45.3%, and both Air France and the stronger KLM had negative operating margins of -3.5% and -0.7% respectively. The company said passenger revenue would increase in the final quarter, but it warned that fuel still had further to rise. <br/>
Italian railway company Ferrovie dello Stato (FS) has put in a bid for Alitalia, paving the way to create an integrated transport company, Italy’s economic development minister Luigi Di Maio said. He also confirmed several other companies had submitted offers for the troubled carrier, which filed for bankruptcy in May 2017. “I have always said that I don’t want to save Alitalia; I want to relaunch it and, thanks to FS’s willingness to take part in this big project, the first company in the world to bring together road, rail and air can be born,” Di Maio said. FS had confirmed Oct 30 that it would make an offer for Alitalia, without giving any further details. FS CE Gianfranco Battisti had previously said his company saw synergies with Alitalia that were worth exploring. <br/>
Faced with rising fuel costs and a weakened Chinese yuan against the US dollar, China Eastern Airlines reported a 42.1% decline in operating profits to CNY5.8b (US$844m) for the first 9 months of 2018, compared to the same period last year. Net profit for the period was CNY4.2b, putting the airline second behind Air China in earnings among the country’s big-3 airlines. While operating revenues increased 13.4% to CNY87.9b year-over-year, operating expenses rose by the same rate to CNY74.4b. Profits from investments plummeted 91.3% from CNY2b to CNY175m. Capacity was up 7.8% to 181.5b ASKs YOY, while RPKs grew by 9.7%. Airfreight capacity also increased 18.9% to 5.9b AFTKs. The airline carried 90.5m passengers, a 9.6% increase YOY, with an average load factor of 82.9%. <br/>