Air France-KLM’s operating loss deepened in the first quarter of 2024, as “exceptional” operational disruptions and falling cargo revenue dented the European airline group’s performance.
The business had warned of what turned out to be a “pretty tough” January-March 2024 period during its full-year 2023 briefing earlier this year, and notes that forward ticket sales and travel demand still point to a “promising” summer season.
“Despite a challenging start to the year with persistent geopolitical tensions, Air France-KLM recorded further revenue growth this quarter, capitalising on a structurally robust travel demand,” says group chief executive Ben Smith.
“We… remain confident in our ability to achieve our 2024 unit cost outlook, and are focused on executing our strategic roadmap to deliver our mid-term commitments.”
An operating loss of €489 million ($523 million) during the first quarter was €183 million deeper than that achieved in the same period of 2024 and came after operational disruptions during the three months pushed up unit costs, particularly relating to difficulties securing aircraft spare parts. Cargo revenues were some €157 million down year on year, but lower jet fuel costs and higher passenger unit revenues had a positive impact on earnings.
| Air France-KLM first-quarter 2024 airline earnings | |||
|---|---|---|---|
| Source: Air France-KLM | |||
| Revenue | Operating profit | Change YoY | |
| Air France Group | €4.03bn | -€249m | -€68m |
| KLM Group | €2.74bn | -€290m | -€163m |
| Transavia | €462m | -€166m | +€6m |
Overall revenues were up 5% year on year at €6.7 billion, with passenger unit revenue up 2.1% but group unit revenue declined 1.8% amid the impact of declining cargo income.
The group’s first-quarter net loss deepened by €143 million to €480 million.
A passenger load factor of 86.4% was up marginally on a 4.5% rise in capacity and 6.2% increase in traffic. Capacity in the first quarter was down around 3% from the same period in 2019.
After a 4% increase in unit costs in the first quarter – driven by the operational disruption and a one-time payment to KLM employees – Air France-KLM continues to guide for a 1-2% increase in unit costs for the full year as it deploys more capacity.
It does not offer guidance on full-year profitability.
