(Reuters) – Air France-KLM published a larger-than-expected first-quarter operating loss on Tuesday, as the Franco-Dutch group faced rising costs, fueled in particular by customer compensation and a payment exceptional salary for KLM employees in January.
European airlines are struggling to respond to the soaring costs they have faced in recent months, amid social unrest and geopolitical disruption. Among them, Lufthansa warned earlier this month on its annual results, citing a series of strikes having disrupted its operations.
Air France-KLM, however, confirmed its annual objectives on Tuesday, in particular an expected unit cost of between 1% and 2% compared to 2023, despite an increase of 4% in the first quarter.
“As expected, our operating profit was impacted by costs linked to operational disruptions and a slowdown in the Cargo business,” group chief executive Ben Smith said in a statement.
“We nevertheless remain confident in our ability to achieve our unit cost targets for 2024,” he added.
Air France-KLM recorded an operating loss of 489 million euros over the January-March period. Analysts expected a quarterly loss of 424 million euros, according to a consensus compiled by the group, after a loss of 306 million euros in the fourth quarter of 2023.
Its net result was also disappointing, with a loss of 480 million euros while analysts on average expected an amount of 407 million euros.
This is explained in particular by KLM’s operational difficulties between last December and early March, resulting in the payment of compensation to customers of around 50 million euros in total.
(Joanna Plucinska in London and Diana Mandia in Gdansk; French version Jean Terzian, edited by Blandine Hénault)
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