Air France-KLM saw its revenue growth reaches 4.8% in 2024, reaching €31.5 billion, the company announced on Thursday. The airline group benefited from strong cargo demand, driven by e-commerce expansion and global shipping issues. The increase in revenue highlights the company’s ability to navigate challenges in the aviation industry while maintaining financial stability.
Passenger Demand Fuels Fourth-Quarter Growth
In the last three months of 2024, Air France-KLM recorded a 6.4% rise in revenue, bringing the total for the quarter to €7.9 billion. This growth was largely due to increased passenger demand, particularly in premium cabins and on transatlantic routes. Many travelers opted for higher-class seating, boosting the airline’s earnings.
The surge in passenger numbers and strong sales in the business and first-class segments helped offset some operational challenges. As a result, the company’s EBITDA rose by €36 million, reaching €4.2 billion for the year.
Following the earnings announcement, Air France-KLM’s stock price jumped by more than 16% on Thursday morning, reflecting investor confidence in the company’s performance and future prospects.
Financial Challenges Despite Revenue Growth
Despite the strong revenue increase, Air France-KLM faced some setbacks. The company reported a decline in operating income, which fell by €111 million to settle at €1.6 billion in 2024. Additionally, net income saw a sharp drop of €501 million, ending the year at €489 million.
Rising operational costs, including higher airport fees, aircraft maintenance expenses, and personnel wages, contributed to these declines. However, the company remains optimistic about improving profitability through strategic initiatives.
CEO Outlines Expansion and Sustainability Plans
Air France-KLM CEO Benjamin Smith highlighted key priorities for the airline’s future. He emphasized the importance of premium service, fleet modernization, and sustainability.
“We strengthened our global presence by launching new routes and securing strategic partnerships, including our minority stake acquisition in SAS,” Smith said.
The airline also focused on sustainability by investing in sustainable aviation fuel (SAF), aiming to reduce carbon emissions. Additionally, fuel costs in the fourth quarter were lower than expected, helping to improve the company’s financial position.
Cargo Division Sees Strong Demand
The airline’s cargo operations played a significant role in its 2024 performance. Increased demand from Asia, coupled with ongoing shipping disruptions in the Red Sea, led to a strong peak season. E-commerce growth also contributed to higher cargo volumes.
The company expects cargo demand to remain high in 2025, with plans to optimize operations and expand capacity where needed.
KLM Struggles with Rising Costs
While Air France-KLM performed well overall, KLM faced more significant financial challenges. KLM’s operating result dropped by €234 million, landing at €416 million for 2024. This decline came despite a 5.4% increase in revenue.
Higher costs for equipment, airport services, and personnel put pressure on KLM’s profitability. To address these challenges, the airline aims to improve EBIT by €450 million in the near term. It has also set a long-term goal of achieving an 8% profit margin between 2026 and 2028.
KLM CEO Marjan Rintel acknowledged the difficulties but expressed confidence in the company’s strategy. “We are facing rising costs and operational constraints, but demand remains strong, and we are making progress in improving efficiency,” she said.
KLM is also focusing on fleet modernization, introducing the Airbus A321neo to improve fuel efficiency and reduce emissions. Additionally, the airline recently completed the rollout of its Premium Comfort Class, which has received positive feedback from passengers.
Air France-KLM remains focused on its transformation plan to ensure long-term financial stability. The company aims to balance expansion, cost efficiency, and sustainability efforts to strengthen its position in the global airline industry.
As the travel industry continues to recover, Air France-KLM plans to capitalize on high passenger demand, premium service offerings, and strategic partnerships to drive future growth. With ongoing investments in sustainability and fleet improvements, the company is positioning itself for long-term success.
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