Air France-KLM reports better than expected operating profit for 2016 and says it has made a ''resilient'' start to 2017 as it promises further cost-cutting efforts this year. Harvey Biggs reports
BROADCAST AND DIGITAL RESTRICTIONS~** Broadcasters: NONE Digital: NONE~** Air France-KLM beating market expectations, posting an operating profit of just over one billion euros for 2016. Lower fuel prices helping boost the Franco-Dutch carrier's bottom line. Now the group is laying plans to fight back against low cost rivals like Ryanair, with a budget unit dubbed "Boost." (SOUNDBITE) (English) REUTERS CHIEF AIRLINES CORRESPONDENT, VICTORIA BRYAN, SAYING: "This will be under its Air France unit and it's hoping to bring pilot costs down by 15 - 40 percent on those planes." Pilots unions not keen though. That could bode ill for a company that has been dogged by labour unrest. Security fears also weighing on the company's French arm. (SOUNDBITE) (English) NAEEM ASLAM, CHIEF MARKET ANALYST, THINK MARKETS, SAYING: "KLM and Air France if you just divide them up in parts - you'll see the productivity. The Dutch airline - that has improved to 4.2 percent - on the French side that's 2.3 per cent. But they still need to do a lot of restructuring, they need to beat their competitors." The company describing its start to the year as resilient. But fuel prices are back on the up and there's little sign that those security worries will go away.