Air France-klm swings to quarterly loss
LONDON/GDANSK: Air France-klm swung to an unexpected loss in the last quarter of 2023, hit by higher costs.
European airlines have reported strong demand for the coming year, but supply chain constraints have led to higher costs and maintenance delays while geopolitical tensions have also disrupted plans and schedules.
The Franco-dutch airline group reported record full-year revenue up 14 per cent to 30 billion euros and operating profit of 1.7 billion euros ($1.8 billion), up from 1.19 billion a year earlier and in line with expectations. However, it also posted a fourth-quarter operating loss of 56 million euros, missing a consensus 88 million euro profit forecast in a company poll of analysts, owing to a 3.5 per cent increase in unit cost that was only partly offset by lower jet fuel prices.
The group recorded an increase in operational disruption costs of 70 million euros in the period.
The annual operating margin rose to 5.7 per cent, up 1.2 percentage points.
A scarcity of spare parts and a shortage of engineering labour has proved challenging for the group, but it was able to pay down 1.3 billion euros of debt, much of which was amassed during the pandemic travel shutdown, leaving outstanding net debt at 5 billion euros.
Air France–klm, also known as Air France– KLM Group, is a French airline holding company with its headquarters in the rue du Cirque, Paris. The group’s three major brands are Air France, KLM and Transavia. Air France–klm is the result of the merger in 2004 between Air France and KLM. Air France–klm is the result of the merger in 2004 between Air France and KLM. Both Air France and KLM are members of the Skyteam airline alliance.
The group’s main hubs are Paris–charles de Gaulle Airport, Paris Orly Airport and Amsterdam Airport Schiphol. Air France–klm Airlines transported 83 million passengers in 2022.