Kevin O'Toole/LONDON
KLM HAS REVEALED record profits, although some of the shine was taken off the announcement by pilots staging a second one-day strike.
The Dutch carrier reports net profits of DFl470 million ($300 million) for its financial year to the end of March, staying comfortably ahead of market expectations.
The airline expects a "slight improvement" in profits again for this year, but financial analysts believe that the airline's projection is over-cautious, possibly coloured by the pilots' dispute.
Analyst forecasts suggest that, profits could reach the DFl540 million mark, as the airline reaps the benefits of rising traffic and cost savings. The forecasts are backed, by KLM's improving performance, over the second half of the year, which suggests that the recovery is gaining momentum.
The only cloud over KLM's performance has been the running dispute with its pilots in negotiations over contract terms. The dispute led to a 6h strike at the end of May, and again on 8 June, as the annual results were released.
Apart from the union dispute, the airline has been forging ahead, showing an 8% rise in passenger traffic over the last year and a 14% growth for cargo. Restrained capacity-growth also helped passenger load factors reach the 73% mark. Yields continued to slide, falling by 2% on passenger services and 4% for cargo, but the decline was more than offset by a 6% fall in unit costs.
The KLM figures add further fuel to the recovery, taking place in the European airline market, through traffic growth, cost-cutting and capacity constraints.
There are signs that drives to cut costs further, could run into more union protests, however. Scandinavian Airline System (SAS) pilots have become the latest to announce industrial action, giving notice of a series of one-day strikes. The dispute centres on wage claims, which SAS says, are for twice the average increase in the Scandinavian labour market.
Source: Flight International
