" A year marked by both operational and external challenges" said Benjamin Smith, CEO of the Air France-KLM group. With the Olympic Games having put the airline in the spotlight, but diverted travellers from the Paris destination - a impact estimated at 250 million euros - Several factors weighed on the airline group's profits, including operating difficulties at the start of the year leading to compensation of 300 million euros for customers, and a long-standing strong dollar affecting fuel costs. All of this culminated in a net profit of 317 million euros, down -66 % on the 934 million recorded last year.
However, these financial results should not mask the fact that sustained activityDespite the summer slump, operating income rose by 2% to 1.6 billion euros. Buoyed by an excellent last quarter, the Group's airlines carried almost 98 million passengers in 2024, an increase of +4.7% year-on-year. At the same time, through the opening of new routes, capacity increased by +3.6 %, resulting in unit revenue in available seat kilometres (ASK) up +1.0 % at constant exchange rates. The average load factor stood at 87.6%, up 0.6 points on 2023.
All in all, Air France-KLM was forecasting record sales of over €30 billion in 2023. This year it has done even better, with 31.5 billion euros, an increase of 4.8 % compared with 2024. The Corporate segment contributed to this growthThis was due to a marked trend for Premium cabins on medium and long-haul routes. More broadly, the Group recorded growth of +29% in this Premium comfort segment through an improvement in cabin load factors, of +1.7 pts for Air France and 5.1 pts for KLM.
However, if the Dutch airline renews its fleet and raises the level of its offer, KLM is not in the best of shape. Penalised last year by spare parts supply problems, it has been hit above all by the cap on the number of flights at Amsterdam Schiphol and the future surge in airport charges expected this year, of +41%. The Group has estimated its impact at between €65 and €110 million, although this is less than the impact of the tax in France, which is estimated at between €90 and €170 million, and probably more in the higher range. As far as KLM is concerned, the launch last October of the Back on Track programme, marked among other things by the reduction of 250 positions in non-operational functions, should generate a structural improvement in operating income of around 450 million euros in the short term.
Positive news for Transavia
Conversely, Transavia is benefiting from a positive trend, with unit revenue up 6.6% at constant exchange rates for capacity up 8.3% and just over 23 million passengers by 2024. Its operating profit rose by 100 million euros over the year as a whole to reach a positive figure of 3 million euros. " This performance was driven by the gradual maturing of the network from Orly, a dynamic pricing policy, the introduction of cabin baggage charges and the integration of new Flying Blue features." emphasises the Air France-KLM group in its press release. The ongoing replacement of Air France flights by Transavia flights at Orly should further boost the low-cost airline's momentum, while the group will be concentrating at the same time on upgrading its offering at Paris CDG.
In this context, Transavia's offer should grow further this year with an expected increase in capacity of 10% in available seat kilometres, while this growth should be around 3% to 5% for both Air France and KLM, on both medium and long-haul routes. Among the Group's other prospects for the coming year, Air France-KLM will pursue its strategy of reducing CO2 emissions by securing its supply of sustainable fuel - the Group being the best performer in the sector - and the fleet renewal. From 201 % in 2023, the percentage of new-generation aircraft has risen to almost 27 % by the end of 2024, with the Group planning to reach 80 % by 2030.
The question-and-answer session with analysts and journalists following this presentation of results gave Air France-KLM's management the opportunity to go back over the airline's external developments, in particular the acquisition of a 19% stake in the Scandinavian airline SAS, initiating a move towards a majority shareholding. " We don't control the decisions, but we are involved in a more solid commercial partnership.explains Benjamin Smith. The benefits exceed expectations, with code-share flights with Air France and KLM, more SAS traffic to Atlanta, Delta's hub" .
Proposed merger with TAP Portugal
This merger will no doubt lead to others, with Air France-KLM now eyeing up TAP Portugal, which is in the process of being privatised. " It's nothing new, we've been interested in the Iberian Peninsula for a long time." explained Benjamin Smith, seeing this possible addition as an opportunity to strengthen the Group's positions in South America, and in Brazil in particular.
This project, which was pushed by Emmanuel Macron during his recent visit to Lisbon, seems to be meeting with interest from the Portuguese government, not least because Air France-KLM no longer has to demonstrate its ability to work with French and Dutch political authorities. " We have high hopes" admits the CEO of Air France-KLM, explaining that the Portuguese government had set a number of red lines for this merger, including preserving the TAP brand, maintaining and even strengthening the South American network and supporting employment.
Still on the Iberian peninsula, could Air France-KLM be interested in another airline, in this case Air Europa, since IAG, its 20% shareholder, decided to throw in the towel last summer? Benjamin Smith's answer: " We know them well, they are part of SkyTeam and have a different network to TAP. Yes, we are looking at them."
