Record figures again for Air France-KLM

French-Dutch airline group Air France-KLM has seen sales and profits rise to record highs in 2023 despite losing in the fourth quarter. The group ended the year with a net profit of 934 million euros, its highest-ever profit figure. Sales rose to 3 billion euros, 14% more than in 2022.

These record figures starkly contrast the Covid-19 crisis when the group suffered losses of more than 10 billion euros in 2020 and 2021 combined and had to turn to the French and Dutch states for help.

93,6 million passengers

The airline company saw over 93 million people take one of its planes last year, up from more than 83 million a year earlier. That number is still considerably lower than the more than 104 million passengers in 2019, before the health crisis. But thanks in part to more expensive tickets, a record turnaround was thus still recorded.

However, the last quarter was operationally loss-making, with a net loss of 256 million euros. This was due in part to difficulties in the cargo business, higher unit costs, the war between Israel and Hamas, and subsequent unrest in the region.

Air France-KLM expects the Gaza disruptions to continue to affect results in the first quarter. Air France has been flying to Tel Aviv again since the end of January; KLM will follow in April. Subsidiary Transavia has already suspended the flights until at least June.

€650 million profit for KLM

It should also be noted that the Air France group fares better than the KLM group. For instance, Air France provides more than 60% of the group’s turnover, compared to about 40% for KLM.

KLM had problems with parts delivery, and bad weather, especially in December with storm Pia, led to flight cancellations. A loss of 18 million euros went into the books for the fourth quarter. The airline is also struggling with a shortage of staff. KLM is looking to hire 265 pilots this year, 100 more than in 2023. An extra 200 to 300 technicians are also needed.

However, KLM does look back on the year with satisfaction, with record revenue of 12 billion euros. For 2023, the airline posted a profit of 650 million euros.

Schiphol litigation and state aid

Yet the shrinkage plan at Schiphol still bothers the airline. Originally, Schiphol was supposed to have a ceiling of 460,000 flights this year, or about 10% fewer flights, and Air France-KLM is by far the biggest user of the Amsterdam airport.

However, the shrinkage plan has been shelved because the European Commission has significant problems with the cabinet proposal. If Brussels were to approve the plans, they could not be implemented until April 2025 at the earliest. If Brussels were to approve the plans, they could not be implemented until April 2025 at the earliest.

Air France-KLM is also betting heavily on a new fleet and those new aircraft, which produce much less noise and fewer emissions, bringing the targets the cabinet wants to achieve close. But Dutch infrastructure minister Mark Harbers also stressed that “the cabinet is committed to restoring the balance between Schiphol and its environment.” However, the new government – negotiations on its composition are currently underway – may take a different view.

Moreover, in February, the European Court of Justice ruled that the 3,4 billion euros of state aid granted by the Dutch government to KLM in 2020, in full corona crisis, was illegal, just like the state loans France gave to Air France-KLM and Air France. Ryanair had brought the case. The airlines may have to repay the advantage they gained from that aid over airlines that did not receive it.