Air France-KLM expects to increase capacity by between 4 and 5 per cent in 2025 after posting a 2024 operating profit of €1.6 billion, according to an earnings report on Thursday (6 March).
The European airline group saw revenues increase by 6.4 per cent year-on-year to €7.9 billion, driven by a 3.6 per cent increase in capacity throughout the year and a 4 per cent uptick in revenue per available seat kilometres (ASK) in the fourth quarter. Group load factor for the year also increased 0.5 percentage points to 87.8 per cent.
The positive result, however, marks a 6 per cent decline in profits compared to 2023 and comes after “a year shaped by both operational and external challenges”. This included the “negative” impact of the Paris Olympic Games and increases in operating costs across both Air France and KLM.
Air France saw full-year revenues increase 3.8 per cent to €19.2 billion, however profits of €980 million were €105 million less than the year prior. In its earnings statement, Air France said the drop in demand caused by the Paris Olympics during the peak summer period impacted revenue by approximately €200 million.
Dutch carrier KLM, meanwhile, saw its operating profits drop €234 million year-on-year in 2024 to €416 million. Despite a 5.4 per cent increase in revenues, profitability was hampered by “continued difficult operations driving a surge in costs”.
KLM CEO Marjan Rintel said the carrier’s “disappointing” result emphasises the need for operational improvements. The carrier, in October, launched its €450 million restructuring process and in January announced it would cut 250 non-operational jobs in an effort to improve profitability.
“Our results for 2024 show two different sides,” Rintel said in a statement. “On one hand, we are still not operating at 100 per cent of our flight capacity and costs continue to rise sharply. As a result, we run the risk of not earning enough to keep investing in our future, although I’m confident that our plans will help us to improve our operations and finances for the long term.”
Air France-KLM CEO Benjamin Smith said the group remains focused on its sustainability roadmap through continued fleet renewal and investments in alternative aviation fuels.
At the end of 2024, new generation aircraft made up 27 pet cent of the group’s total fleet, with plans to increase this to 80 per cent by 2030.
The group also incorporated 103,000 tons of alternative aviation fuel last year, which represents 1.25 per cent of total fuel usage and a 13.6 per cent increase compared to 2023, according to Air France-KLM.
For the year ahead, the group expects to increase capacity by 4 to 5 per cent and anticipates a “low single digit increase” in costs compared to 2024.
“In 2025, we will continue to deliver on our strategic roadmap and keep transformation as our number one priority,” Smith said. “In this context, we remain confident in achieving our medium-term ambition, with a disciplined approach to capital allocation and cost efficiency.”