Air France-KLM said improving price trends helped it report better than expected third quarter profits, joining major European peers in benefiting from strong summer demand.
The Franco-Dutch company reported a 38.6% increase in third quarter operating profit to €1.022 billion, compared to average analyst expectations of €953m in a Reuters poll.
Unit revenues - a closely watched measure of how much income is generates per unit of capacity - increased 4.1% in the quarter.
Air France-KLM said it expected an increase in the fourth quarter as well, driven by long-haul bookings.
"Unit revenues in October were positive, forward bookings for November and December are ahead of last year," the airline's finance chief Frederic Gagey said.
Lufthansa last week said unit revenues rose 4.5% in the third quarter, outpacing IAG, which saw a 2.2% rise as it added capacity from Aer Lingus and low cost unit Level to transatlantic routes.
Air France-KLM has also been benefiting from a return of US and Asian passengers to Europe this year after attacks deterred travellers last year.
The group also said today it would be introducing an €11 one-way surcharge on bookings made via third-party GDS systems, such as Amadeus, Travelport and Sabre from April 1 2018.
It is following the example of Lufthansa and British Airways as airlines use new technology to gain more control over ticket sales.
Air France-KLM said it still wanted to cut unit costs by 1-1.5% this year, although it now said that target was excluding effects caused by higher load factors and profit sharing.
The group's French brand has lagged rivals on the cost-cutting front, leading to lower profitability.
Air France reported a Q3 profit margin of 11%, with KLM at 18.5%. That compares with an operating profit margin of 18.1% for the Lufthansa brand and 21.5% for British Airways.
Its Air France business has set up a new lower cost airline Joon, which it hopes will attract a younger generation of customers and make it more competitive against leaner Gulf-based rivals and low cost carriers.
Air France-KLM did not give a profit outlook for the year. Analysts forecast on average €1.519 billion, which would be a 45% jump on last year.
