Air France-KLM Reports Improved Performance Amid Growing Passenger Demand
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Loading... - Liisa Turunen
- 07 Mar 2025
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Air France-KLM has announced a positive financial performance for 2024, driven by increased passenger demand and a robust cargo division. The airline's revenue grew by 4.8% to €31.5 billion, reflecting a strong recovery in the travel sector. The company reported earnings before interest, taxes, depreciation, and amortization (EBITDA) of €4.2 billion, marking an annual increase of €36 million. In the fourth quarter, revenues rose by 6.4% to €7.9 billion, primarily due to strong demand for premium cabins and a surge in travel across the North Atlantic market. Following this announcement, Air France-KLM's shares surged over 16%, indicating investor confidence in the airline's recovery and growth prospects.
Despite the overall revenue growth, the company reported a decline in income from operating activities, which fell by €111 million to €1.6 billion, while net income dropped significantly by €501 million to €489 million. The airline's cargo division experienced a peak season in 2024, benefiting from rising e-commerce orders and disruptions in ocean shipping, particularly due to unrest in the Red Sea. This contributed to improved cargo performance, highlighting the airline's adaptability in a changing market.
Benjamin Smith, CEO of Air France-KLM, expressed optimism about the airline's performance, stating that the fourth quarter delivered a strong finish despite operational and external challenges. He emphasized the airline's commitment to premium service and sustainability initiatives, including fleet renewal and sustainable aviation fuel (SAF) projects. Smith also noted the airline's expansion efforts, including new routes and strategic partnerships, such as the recent acquisition of a minority stake in SAS, which has already shown promising results.
In contrast, KLM reported disappointing earnings for 2024, with its operating result falling by €234 million to €416 million. Although revenue increased by 5.4%, rising costs related to equipment, airport fees, and personnel limited profitability. KLM plans to boost its EBIT by €450 million in the near term and aims for an 8% profit margin between 2026 and 2028 to support future strategic and fleet renewal plans. CEO Marjan Rintel acknowledged the challenges, stating that the airline is still not operating at full capacity and that costs continue to rise sharply. However, she highlighted positive developments, including growing customer demand, operational improvements, and the introduction of new aircraft.
In summary, Air France-KLM's 2024 performance reflects a strong recovery in passenger demand and a successful cargo division, despite some challenges in operating income. The airline's strategic focus on premium service, sustainability, and expansion positions it well for future growth, while KLM faces hurdles but remains committed to improving its operations and financial health in the coming years.
