Air France-KLM Records Increase in Q1 Revenue

Air France (AF)-KLM (KL) announced today that it had exceeded expectations in its first quarter revenue and demonstrated strong cash flow due to a worldwide rebound in air travel and high summer ticket sales.



May 5, 2023

DALLAS – Air France (AF)-KLM (KL) announced today that it had exceeded expectations in its first quarter revenue and demonstrated strong cash flow due to a worldwide rebound in air travel and high summer ticket sales. 

The company reported a 42% year-on-year increase in revenue to €6.33bn (US$6.9bn), up from €1.9bn (US$2bn) for Q1 2022. However, it still posted an overall operating loss of some €306m (US$338m).

The group also stated that it had not observed any adverse effects of the cost-of-living crisis, highlighting its sales of over €1.5bn (US$1.6bn) in ticket revenue during Q1 2023 and strong demand across its network.

These numbers have been driven by strong yields and a surge in passenger numbers, carrying 19.7 million across the whole group, up 35% compared to Q1 2022.

KLM Royal Dutch Airlines Boeing 777-200ER (PH-BQM) @ AMS. Photo: Adrian Nowakowski/Airways.

CEO Comments

Speaking of the results, Group CEO Benjamin Smith said, ”In the first quarter, Air France-KLM further capitalized on the recovery momentum in the airline industry. I’d like to thank all my colleagues who have worked tirelessly throughout the quarter to ensure we continue on our path to sustained profitability.

"The Group continued to show strong revenue growth as well as robust cash flow generation thanks to the very encouraging summer ticket sales. This is paving the way for a busy holiday season across our global network, which all of our teams are actively gearing up for. I am also pleased that we have now fully repaid all State aid, which releases us from the associated restrictions and gives us back our full strategic autonomy.

"We now stand on our own feet. Looking ahead, we remain focused on further strengthening our balance sheet and delivering the transformation efforts that will enable us to continue to improve our competitiveness while accelerating our decarbonization efforts.“

In recent months, operations at KLM's biggest base, Amsterdam (AMS), have been affected by strikes and a lack of staff. Photo: KLM.

Impact of Strikes

European airlines have canceled thousands of flights due to strikes and staff shortages at major airports. However, AF-KL reported that the impact of French air-control strikes has been limited and smaller than that of previous strikes.

In March, French airport operator ADP revealed that it lost around 470,000 passengers in the first quarter of the year due to strikes against French President Emmanuel Macron's pension reform.

The group has also revised its capacity outlook for the year 2023 to around 95%, which is narrower than its earlier estimate of 95% to 100%. The group cited a shortage of workers, especially pilots, as the reason for the decrease in capacity but stated that it was not linked to a decrease in demand. Indeed, the group stated that demand across all of its main networks including the North `Atlantic, Latin America, Asia, the Middle East, Africa and European routes were all increasing with strong yields.

According to a statement from AF-KL, Transavia (HV), its low-cost unit, was affected by the first-quarter air traffic control strikes in France, grounded aircraft in the Netherlands, and higher fuel prices, which impacted its operating result. The group reported that the quarterly operating loss improved to €304m (US$333m) but was still wider than the average loss of €282m predicted by analysts polled by the company.

Feature Image: Air France F-HTYH Airbus A350-900. Photo: Alberto Cucini/Airways