Company Watch - Air France KLM Group.

For more company data and analysis, please go to: http://www.airguideonline.com/professional.htm May 22, 2006

City center check-in are gaining in popularity, with the exception of BA who dumped Paddington. Following mention of the new Dubai facility for Abu Dhabi, we are reminded that it is not the only facility provided in a foreign country. With the closure of the Brussels - Charles de Gaulle flights (well, all except one morning special) Air France have come up with a regular Thalys schedule that provides for a check-in at Brussels Midi and a dedicated coach for air travelers. Journey time to CDG is just 70 minutes. May 21, 2006

Air France-KLM 'confirms' merger with billion-dollar profit. Air France-KLM Group reported net income of [euro]913 million ($1.17 billion) for the financial year ended March 31, a 29.3% increase over the [euro]706 million earned in 2004-05. May 19, 2006

Air France-KLM Passenger traffic grew 8.6% on a capacity increase of 6.2%, leading to a 1.7-point lift in load factor to 80.6%. This was 5 points above the AEA average, "confirming Air France-KLM's strengthening position in these markets," according to the company. Passenger revenues increased 0.2% to [euro]16.94 billion with yield rising 1.5% to 8.40 euro cents. May 19, 2006

Air France-KLM 's full-year operating revenues rose 10.2% to [euro]21.45 billion whereas costs were up 8.4% to [euro]20.51 billion. Consequently, operating profits soared 69.3% to [euro]936 million from [euro]553 million in the prior year. Operating margin improved "significantly" from 2.8% to 4.4%. "The synergies generated by the merger, combined with our ongoing cost-control measures, have not only enabled us to attenuate the impact of the rise in fuel prices, but also to improve our margins significantly," Spinetta said. Fuel costs reached [euro]3.59 billion, up 32% from the prior FY. May 19, 2006

Air France-KLM's net income for the fourth quarter was [euro]7 million, down 30.3% on the year-ago period. Activity levels remained "robust at all the group's businesses," lifting revenues 12.7% to [euro]5.19 billion. Operating charges rose 12.1% to [euro]5.2 billion, mainly owing to fuel costs. Operating result was "at breakeven" as the loss narrowed to [euro]4 million from [euro]30 million in the year-ago quarter. May 19, 2006

Air France-KLM's Spinetta outlook was cautious as he said, "The current year has begun with a further sharp rise in oil prices. Nevertheless, our aim is to generate operating income of at least the same level as last year." AF-KLM expects to boost capacity by some 5% this year. May 19, 2006