Air France-KLM shares jump 12% as profits rise

Air France-KLM shares rose 12.5 percent in Paris on Thursday after the airline group reported a 10 percent increase in third-quarter operating profit despite higher fuel costs.

Operating profit reached 1.35 billion euros, or $1.5 billion, in the July-to-September period. Passenger traffic rose 1.8 percent, and unit revenue per available seat kilometre increased 6.6 percent to 9.70 euro cents.

The group said higher ticket prices helped offset fuel costs, which were 436 million euros higher than in the same quarter last year. It expects full-year fuel costs to reach 9.3 billion euros, up 2.3 billion euros from last year.

Air France-KLM said it would pursue additional structural measures to improve profitability at KLM, its Dutch unit. KLM said the restructuring would include a further 15 percent cut in overall jobs, with around 5,000 posts reorganised, and that it aimed to eventually boost earnings by one billion euros a year.

Group chief executive Benjamin Smith said the performance reflected strategic choices made in recent years, including Air France's move upmarket.