The head of Air France-KLM has unveiled new profit targets and planned investor payouts as part of a five-year strategic plan that follows crippling strikes and tension between the group’s Franco-Dutch partners. “When I started, Air France was in the middle of a big social crisis coming off a tough strike that . . . had cost the group E335m and had destroyed all trust, respect, confidentiality in Air France and the group,” said CE Ben Smith, who took charge of the airline in September last year. Air France-KLM, which was formed by Air France’s 2004 merger with Dutch KLM, plans to lift profit margins to 7-8% over the medium term as well as restoring dividends. Smith said the group would aim to pay a dividend for the first time since 2008, once its operating income hit E1.9b, having been E1.3b in 2018. The group has long reported lower operating margins than its main European rivals, dragged down by performance at Air France. In 2018, Air France-KLM’s profit margin was 5%, compared with 7.4% at Lufthansa Group and IAG’s 13.2%, according to Capa — Centre for Aviation. “We believe that we can attain the same margins as Lufthansa Group,” said Smith. “And in order to do that with the group, we have to improve the Air France side of the business significantly.” Apart from the strikes, which ended in spring 2018, Air France loses E170m to E200m a year on its French domestic market, due in part to competition from high-speed trains. The only economy offering on which it makes money is long-haul.<br/>
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Garuda Indonesia returned to profit for the first nine-months of 2019 with a $122.8m net profit, reversing the $110.2m loss over the same period last year. The Indonesian flag carrier earned $3.5b in operating income, boosted by a $51.7m earning on hedge transactions. Operating costs eased 2% year-on-year (YOY) to $1.9b, most significant items were “passenger services expenses” and “administrative expenses,” although sales, promotion and maintenance expenses increased. Domestic traffic, especially generated from capital Jakarta, grew the fastest at 16.5% YOY, partly because the carrier raised domestic airfare against the president’s call to make airfare affordable. Most international routes declined, except for Tokyo and Sydney flights. Garuda did not reveal operating statistics for the period.<br/>