Air France-KLM has reported continued growth for the year’s second quarter despite rising inflation, posting an operating profit of €733 million that marks an increase of €347 million compared to the same period in 2022.
The European airline group generated €7.6 billion in total revenues for the quarter, a 14 per cent increase compared to Q2 2022, which was driven by an 8.3 per cent increase in capacity, a 9 per cent increase in passenger yield and a three-point increase in passenger load factor.
Group CEO Benjamin Smith said: “In spite of the inflationary context, we posted double-digit growth in our revenues and a record operating margin.”
Despite taking legal action against the Dutch government’s plan to cut the number of annual flights from KLM’s hub at Amsterdam Schiphol Airport, Smith said he is “very glad to see that the situation at airports is much better” compared to the chaos experienced last summer. He added that this season will also serve “as a test run for 2024” when France will host the Olympic and Paralympic Games.
The group reported a 12.3 per cent year-on-year increase in passenger unit revenue per ASK driven by load factor increases across its long-haul network as well as increases in yield on the full network except Asia.
While long-haul markets showed continued signs of improvement, the group noted its domestic network in France was impacted by ATC strikes in April.
Air France posted a 14.9 per cent increase in revenue to €4.6 billion and an operating profit for the quarter of €482 million, up €349 million compared to the same period last year, largely driven by long-haul markets.
KLM, meanwhile, saw revenues increase 11.8 per cent to €3.1 billion and posted a profit of €257 million as the carrier “stabilised operations despite supply chain, tight labour market and fleet issues”.
Throughout the quarter, the group inked a deal with Amadeus to offer its Cytric portfolio to its direct corporate customers and began to pull some of its fares from traditional GDS channels. KLM also rolled out new business class seats after Air France launched a new business class cabin in Q1.
The group welcomed 24.7 million passengers during the second quarter and expects full-year 2023 capacity to reach 95 per cent of 2019 levels.