Air France-KLM Group has said its maintenance business was “highly impacted” by Covid-19 in the third quarter, but there was a “strong performance” in cargo.

Total maintenance revenues fell 47.1 per cent in the quarter compared to the year-before period, to €616 million. The decline was 34.7 per cent in the first nine months, to €2,255 million.

Revenues have been affected by a decrease in group airline activity as a result of Covid-19.

The company’s third quarter operating result stood at €-46 million, a decrease of €117 million.

Air France-KLM said contract signings had restarted in the quarter, and will be included in the order book before year end. It noted that the maintenance business was “carefully managing agreements with clients on payment terms”.

Operating costs were reduced in the third quarter as a result of a reduction in maintenance activities, partial activity pay schemes for employees and other cost savings measures.

The company’s maintenance order book is US$9.3 billion as at 30 September, according to Air France-KLM, a decrease of US$2.2 billion compared to 31 December 2019.

Cargo

Total cargo revenues were up 31.7 per cent (34.1 per cent at constant currency) compared to the year-before period, to €676 million. For the first nine months, total cargo revenues increased 7.1 per cent (6.9 per cent constant), to €1,708 million.

Air France-KLM noted that global air cargo capacity at the end of the third quarter was approximately 15 per cent lower than 2019.

Tightening of supply and demand levels increased yields by a “significant amount”, the company said.

September was the fifth consecutive month of gradual air cargo market improvements. Unit revenue at constant currency was up 104 per cent in the quarter.

The group’s cargo capacity was down 33.3 per cent, primarily driven by the reduction in belly capacity of passenger aircraft but partly offset by the increase of the full freighters’ capacity and mini cargo flights (passenger aircraft with only belly capacity commercialised). Load factors were up 13.4 points for the quarter.

On the demand side, global air freight volumes were down as a result of Covid-19 but are expected to rebound to 90 to 95 per cent of pre Covid-19 levels in 2021, Air France-KLM noted.

“The supply-demand gap of the past months is foreseen to narrow as industry capacity supply will increase and will depend on the passenger traffic recovery,” the company said. Air France-KLM also noted its ongoing preparations to transport potential Covid-19 vaccines.