Air France-KLM has announced a 4.8% rise in revenue for 2024, reaching €31.5 billion, driven by high passenger demand, especially in premium cabins and the North Atlantic market. In the fourth quarter, revenue climbed 6.4% to €7.9 billion. The airline also saw growth in its cargo division, benefiting from increased e-commerce shipments and global shipping disruptions.
Financial Performance and Key Metrics
The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled €4.2 billion, reflecting a €36 million increase from the previous year. A strong peak season in the cargo sector, driven by growing demand from Asia and continued shipping challenges in the Red Sea, contributed to this improvement. Lower-than-expected fuel costs in the fourth quarter also supported Air France-KLM’s profitability.
Despite strong revenue growth, operating income for 2024 fell by €111 million to €1.6 billion, and net income dropped €501 million to €489 million. However, investors responded positively, with Air France-KLM’s stock surging over 16% on Thursday morning following the earnings release.
CEO Outlines Strategic Focus
Benjamin Smith, CEO of Air France-KLM, acknowledged both the company’s achievements and challenges in 2024. He reiterated the airline’s dedication to premium service, fleet renewal, and sustainability initiatives, particularly through the use of Sustainable Aviation Fuel (SAF). Smith also highlighted the airline’s expanded global presence, including its acquisition of a minority stake in SAS, which he described as a significant step in the airline’s growth strategy.
Looking ahead to 2025, Smith emphasized a focus on business transformation, cost efficiency, and disciplined capital allocation. He stated, “We remain confident in achieving our medium-term ambition,” reinforcing the company’s commitment to its long-term strategic goals.
KLM Faces Profitability Challenges
While Air France-KLM posted solid overall results, KLM’s financial performance in 2024 was weaker. The Dutch airline’s operating profit dropped by €234 million to €416 million, despite a 5.4% revenue increase. Rising equipment costs, airport fees, and personnel expenses offset these revenue gains.
To improve financial stability, KLM has set a target of increasing its EBIT by €450 million in the near future. The airline also aims for an 8% profit margin between 2026 and 2028, ensuring sufficient funding for strategic investments and fleet renewal.
KLM’s Strategic Response
Marjan Rintel, CEO of KLM, acknowledged the airline’s financial struggles, attributing them to capacity limitations and rising operational costs. However, she remained optimistic about long-term growth, pointing to higher ticket sales, operational improvements, and the successful launch of the Airbus A321neo and Premium Comfort Class as key drivers of future profitability.
As the airline industry continues to navigate economic challenges and evolving market demands, Air France-KLM remains focused on resilience, strategic growth, and innovation to secure its position in the global aviation sector.
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