(Bloomberg) --

Air France-KLM plans to cautiously ramp up capacity in coming months as the latest coronavirus wave fades and travelers resume booking flights. 

The struggling carrier forecast network capacity of 73% to 78% of 2019 levels during the first three months of this year, according to a statement Thursday. That would just exceed the 72% range achieved in the October-to-December period. 

The increase coincides with improving financial results, with earnings before interest, taxes depreciation and amortization reaching 827 million euros ($940 million) in the fourth quarter from a loss the previous year. That figure is expected to be “around break even” in the seasonally weaker first quarter.

Air France-KLM is the first of Europe’s major network carriers to report earnings after budget airlines Ryanair Holdings Plc and EasyJet Plc outlined plans to raise their own capacities to near normal this summer as ticket sales increase. While the Franco-Dutch operator is making progress toward recovery, its balance sheet is still debt heavy after relying on state bailouts to get through the pandemic.

Air France-KLM pushed back repayment of state aid last year amid a surge in the omicron variant of Covid-19, a move that will keep the airline under European rules restricting acquisitions and executive pay. The carrier is now readying more capital-strengthening measures that could include a rights issue and quasi equity instruments, according to the statement. 

The carrier has 10.2 billion euros of available liquidity and credit lines at its disposal, the airline said.

Earnings Highlights

  • Fourth-quarter Ebitda 827 million euros versus loss of 409 million euros
  • Net debt was 8.2 billion euros at Dec. 31, a 2.8 billion euro decrease
  • Net loss of 127 million euros, compared with about 1 billion euros
  • Adj. operating free cash flow reached 225 million euros
  • Group expects capacity back to the 2019 levels in 2024

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