AF Air FranceKLM

PARIS—Air-France-KLM SA said Thursday that its net profit rose in the third quarter as lower fuel costs and cost-cutting more than offset losses from strikes and pressure on tourism from terror fears.

Air France-KLM, Europe's largest airline group by traffic, said net profit rose to €544 million ($604 million) although revenue contracted 5.1% during the period to €6.94 billion. When stripping out the effects of currency swings and losses and gains on fuel future contracts, net profit fell to €521 million from €612 million in the same period a year ago.

Analysts polled by FactSet on average expected net profit of €502 million during the quarter.

The breathing space given by fuel prices in 2015 that made the Franco-Dutch airline profitable after seven consecutive years of losses is narrowing under the pressure of increased competition on long and medium-haul routes and tourist disaffection for France following recent terror attacks.

Additionally, the company's bottom line suffered from conflicts between management and workers. A partial strike of flight attendants cost the company at least €90 million during the summer. Previously, a clash between unions ended with an angry mob tearing off executives' shirts.

Still, despite all the headwinds and no improvement foreseen, Mr. Riolacci said he expects the company to remain profitable in 2016.

Write to Inti Landauro at inti.landauro@wsj.com

(END) Dow Jones Newswires

November 03, 2016 04:45 ET (08:45 GMT)

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