PARIS (Reuters) -Air France-KLM should return to core profit this year, the Franco-Dutch airline group said on Friday, after a rebound in passenger bookings over the summer helped it beat its earnings forecasts for the third quarter. The group predicted “slightly” positive earnings before interest, taxes, depreciation, and amortisation (EBITDA) in 2021, after posting a 1.7 billion euro ($1.98 billion) loss last year. Shares were up nearly 5% in morning trading. Analysts said the quarterly results were a positive surprise, fuelled by strong demand and cost cuts. The company aims to cut around 14,000 jobs - nearly a fifth of its workforce - across its French and Dutch arms by the end of next year. A reopening of U.S. borders to vaccinated Europeans ahead of the Christmas holidays helped it to forecast positive EBITDA for the last three months of 2021, cementing a profit of nearly 800 million euros during the late summer. The number of passengers booking flights over the quarter nearly doubled from 2020 but remained at about half of pre-pandemic levels. Finance chief Steven Zaat said the results were a “very good signal for the fourth quarter, where we see stronger bookings every week.” The airline estimated its capacity would reach 70% to 75% of 2019 levels in the final quarter, but did not give guidance for 2022 because of uncertainty on reopenings in China and Japan. The rebound helped Air France-KLM reduce its net debt to 8.1 billion euros by the end of September, down 2.9 billion euros from the end of 2020. Last year, the group received 10.4 billion euros in loans backed by France and the Netherlands - its two biggest shareholders - and has for months discussed a recapitalisation plan to lower debts. It has pledged to repay 500 million euros of a state-backed loan in the coming weeks, and the remaining 3.5 billion euros in three instalments between 2023 and 2025. The company is also considering another rights issue under good market conditions, six months after an equity raise saw the French government more than double its stake to just under 30%. ($1 = 0.8576 euros) Reporting by Sarah Morland, editing by Silvia Aloisi and Barbara Lewis