Air France-KLM has reported a solid performance for 2024. The airline group saw its revenue climb by 4.8%, reaching €31.5 billion. This growth came from high demand in both passenger travel and cargo services.
2024 Financial Performance
The airline also saw an increase in earnings. Earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by €36 million, totaling €4.2 billion. This was a strong result despite the challenges the airline faced.
In the fourth quarter, Air France-KLM’s revenue surged by 6.4%, reaching €7.9 billion. This growth was mainly driven by high passenger demand, especially in premium cabins and on North Atlantic routes. The strong revenue in the final quarter helped the airline post a good overall performance for the year.
Following the announcement of the results, the airline’s stock jumped by over 16%. This shows that investors are optimistic about the future of Air France-KLM.
Cargo Services Help Boost Revenue
The airline’s cargo division played a key role in its success. Increased e-commerce activity and shipping disruptions helped boost demand for cargo services. Asian demand for cargo was a significant contributor to the airline’s growth compared to the previous year. This helped offset some of the weaker performance in passenger travel.
Another key factor supporting the airline’s results was lower-than-expected fuel costs in the fourth quarter. This helped improve profitability, especially when many airlines are struggling with high fuel prices.
Challenges in Operating Income and Net Profit
Despite these positive results, there were some challenges. Air France-KLM’s operating income fell by €111 million, dropping to €1.6 billion in 2024. The decline in operating income shows that the airline faced some difficulties during the year.
The group also saw a decline in net income, which dropped by €501 million to €489 million. While this is a concerning result, the overall financial performance was still strong compared to many other airlines.
CEO Benjamin Smith’s Outlook for the Future
Air France-KLM CEO Benjamin Smith expressed confidence about the airline’s future. He highlighted the group’s resilience in overcoming challenges and its focus on premium services and sustainability. Smith also pointed to the company’s growth through expanding routes and strategic partnerships, such as acquiring a stake in Scandinavian Airlines (SAS).
“We are focused on providing the best service for our customers and driving sustainability in our operations,” said Smith. He emphasized that these efforts would continue to help the company grow in the coming years.
KLM Faces Financial Pressure
While the overall results for Air France-KLM were positive, KLM faced more financial challenges. The Dutch carrier reported a drop in operating income by €234 million, down to €416 million. Despite a 5.4% increase in revenue, rising costs in areas like equipment, airport fees, and personnel expenses hurt the airline’s performance.
To improve its financial results, KLM plans to raise EBIT by €450 million in the near term. The airline is aiming for an 8% profit margin between 2026 and 2028. The focus will be on reducing costs and increasing efficiency.
KLM’s Efforts to Improve Performance
CEO Marjan Rintel of KLM acknowledged the challenges but remained optimistic. She pointed to increased passenger demand and progress in operations as signs of improvement. The introduction of the Airbus A321neo and the successful launch of KLM’s Premium Comfort Class were key achievements for the airline.
While KLM is still facing cost pressures, Rintel believes the airline will improve its financial performance in the long term. She is confident that the airline’s focus on modernizing its fleet and enhancing the customer experience will lead to better results.
Optimism and Growth
Looking ahead, Air France-KLM is focused on growing its network and improving sustainability. The group will continue to prioritize premium service and expand its routes. These efforts are expected to support growth in 2025 and beyond.
For KLM, the road ahead requires careful cost management and operational improvements. However, the airline’s strong focus on customer experience and fleet modernization should help it recover from the challenges of 2024.
Air France-KLM’s strong results in 2024 show that the airline group is on the right path, despite some challenges. The company’s focus on growth, sustainability, and premium service will likely support its continued success in the coming years.
For more information on Air France-KLM’s financial performance and future plans, visit Euro News 24.