The billion euros has not been crossed but the record has been broken. Air France-KLM announced, Thursday February 29, a net profit, unprecedented in its history, of 934 million euros profit for an also record turnover of 30 billion euros. He is pleased to have achieved “strong performance” in 2023 despite the effects of the war in the Middle East and difficulties in supplying spare parts.
The Franco-Dutch airline group has also reorganized its financial structure shaken by Covid-19, finding, as promised, positive equity for the first time since 2019, at 500 million euros, he announced in a communicated. Net profit remains slightly below analysts’ projections, who expected an annual net profit of more than 1 billion euros, according to estimates compiled by Factset and Bloomberg.
However, these figures contrast with the nightmare of the health crisis; this, which had caused the company to lose a cumulative 10.4 billion euros in 2020 and 2021, had forced it to carry out two recapitalizations and to call for help from the French and Dutch states. Out of business, it posted, for 2023, an operational profitability of 5.7%, up 1.2 points compared to the previous financial year, which had seen a return to the green with 728 million net profit.
Ten million more travelers than in 2022
“In 2023, we met our commitments by achieving solid operational and financial performances”rejoiced the general director of Air France-KLM, Benjamin Smith, quoted in the press release.
These results were obtained despite a number of passengers transported not yet returning to pre-crisis levels: 93.6 million travelers in total on Air France, KLM and Transavia aircraft last year, that’s 10 .3 million more than in 2022, but still 10.4 million less than in 2019. At the same time, Air France-KLM continued to reduce debt, its net debt falling by 6.33 billion euros at the end of 2022 to 5.04 billion at the end of 2023.
Shadow to this picture, the company suffered a net loss of 256 million euros in the fourth quarter, a drop of no less than 752 million compared to the same period of 2022. Air France and especially KLM suffered from a shortage of spare parts, a recurring problem for the entire sector since the pandemic, but also of qualified labor, which disrupted the availability of certain planes on the ground.
Furthermore, the “geopolitical situation”, mainly the war between Israel and Hamas, led the group to suspend certain lines, including to Tel Aviv, from the beginning of October, and cooled demand for neighboring countries. Transavia, the group’s low-cost airline, suffered and failed to be profitable last year despite continuing its expansion. Finally, freight rates fell sharply after surging in the wake of the pandemic.
No announcement of return of dividend distribution
This end of the year weighed on operational profitability, which was still 7.8% at the end of the first three quarters, at the top of the target range for 2024-2026 (7 to 8%). Despite its record profit, Air France-KLM did not mention a return to dividend distribution to its shareholders on Thursday.
In terms of objectives for 2024, the 20th anniversary of its creation, the company has said it wants to increase its passenger capacity by 5% over one year and limit the increase in its unit costs to between 1 and 2% (compared to 3.5% in 2023). ). Despite a planned increase in activity, it expects to pay a kerosene bill of 7.6 billion euros, down slightly compared to 7.7 billion in 2023.
It will devote between 3 and 3.2 billion to its investment expenses, in particular in the renewal of its devices, an essential tool in reducing its CO emissions.2with non-fossil fuels of which it prides itself on consuming 16% of global production, compared to 3% of conventional kerosene.
Despite the still high price of tickets compared to pre-crisis, the company does not see the “sustained demand” of travel which fueled its prosperity in 2023, and reported reservation rates equivalent to those of last year at the same time, despite the increase in the number of places put on sale.