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KLM Group mid-year results: higher revenues, rising costs

Amstelveen – WEBWIRE

During the first six months of 2023, the KLM Group earned revenue to the sum of EUR 5.6 billion, an increase of 20% compared to the first half of 2022. Operating profit amounted to EUR 129 million, compared to EUR 266 million in 2022 (which then included government NOW support to the sum of EUR 138 million in the first quarter). Our capacity (the number of flights operated) stood at 88% compared to 2019.

When planning the number of flights, KLM closely considers fleet and workforce availability. This ensures stable operations and greater customer satisfaction, as confirmed by our Net Promotor Score (NPS) of 42 for the first six months of the year. We achieved this score despite delays and cancellations resulting from Storm Poly and a temporary malfunction of the baggage system at Amsterdam Airport Schiphol. We are working hard to ensure that our customers experience as little inconvenience as possible due to such incidents.

It is clear that our customers are still very keen to travel, even though tickets are now more expensive. We are pleased that we can once again offer customers the service they expect from us. In fact, the demand for tickets was higher than the number of flights we could operate. The main reason being that aircraft are spending longer in the hangar for maintenance due to worldwide issues affecting component supply. Moreover, we have not completely fulfilled our staffing requirements at various departments yet. KLM was also faced with higher fuel, labour and material costs, as well has higher airport fees. This illustrates the importance of structural cost management. Only by maintaining our financial health can we invest in our customer product and ensure cleaner, quieter, more efficient operations.Marjan Rintel, CEO KLM

Cargo, E&M and Transavia
Cargo revenue dropped sharply during the first six months, following record figures during the coronavirus pandemic. There was a decline in average prices as well as volume. Nevertheless, Cargo still made a positive contribution to our results.

Engineering & Maintenance has been affected by global component supply issues. However, the recovery that began last year continued during the first six months of the year.

At Transavia, a number of incidents as well as delayed deployment of additional leased aircraft meant that fewer flights than planned were operated in the first six months of 2023. These last-minute cancellations were very disappointing for Transavia’s customers. Fortunately, most passengers could be rebooked onto other flights. Despite these setbacks, Transavia generated 15% more revenue.

Results for Q2 2023
During the second quarter of 2023, the KLM Group generated revenue to the sum of EUR 3.1 billion (2022: EUR 2.8 billion) and earned operating profit to the sum of EUR 257 million (2022: EUR 262 million). During this period, KLM arranged a commercial credit facility with 14 international banks and could therefore end government support.

Improving results in the second quarter compensated for the loss in the first quarter. Average ticket prices remained high, which meant revenues rose sharply in all regions of the KLM network. During the first six months, the results remained under pressure because capacity development was lower at KLM, due to fleet and workforce availability. To maintain our competitive edge, we will have to focus more sharply on cost management.Erik Swelheim, CFO KLM

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