Air France-KLM operating results declined
The persistent cost pressure has heavier loaded the French-Dutch airline company Air France-KLM than expected in the spring. Despite a revenue growth of 4.3 percent to 7.05 billion Euro in the second quarter, the operating result dropped by 220 million Euro to 513 million Euro, as the company announced on Thursday. This was below the analysts' expectations of 547 million Euro on average.
"The second quarter of 2024 was confirmed as increasingly challenging for the aviation industry with rising fuel prices and persistent cost pressure," explained CEO Benjamin Smith. This was also contributed to by labor agreements both from Air France in France and from KLM in the Netherlands, as well as higher airport fees in Paris and Amsterdam. Since the announcement in April to counteract savings, the airline has already taken measures, the company stated. These included a hiring freeze. However, the company is holding firm on investments in the renewal of the aircraft fleet.
At the beginning of the month, the airline warned of lower revenues in relation to the Olympics in Paris. Tourists had changed or postponed their travel plans due to the sports event taking place from July 26 to August 11. The lower bookings meant a loss of 160 to 180 million Euro in revenue from June to August.
Despite the revenue increase of 4.3% to 7.05 billion Euro in the second quarter, the business result for Air France-KLM saw a drop of 220 million Euro to 513 million Euro, largely due to higher fuel prices, cost pressure, and labor agreements. Despite these challenges, Air France-KLM remains committed to its investments in the renewal of its aircraft fleet.
