Paradoxical situation and cloudy skies for the Franco-Dutch airline. Despite good attendance results, Air France-KLM suffered a much greater loss than expected in the first quarter of 2024. The company thus lost some 522 million euros, or more than 5 million euros per day, between January and March.
Last year, its first quarter was already at half mast, but to a lesser extent (344 million euros). Rising costs, geopolitical tensions and the freight depression are the reasons pointed out.
Air France-KLM shares at their lowest level in at least 10 years
The Paris Stock Exchange reacted badly on Tuesday morning, the Air France-KLM share, already at its lowest in at least 10 years, losing 3.7% to 9.70 euros at the opening in a market up slightly 0.18%. Despite this loss representing more than half of the record annual profit for 2023 (934 million euros), the company maintained its annual objectives, highlighting solid bookings for the start of the summer within its three companies ( Air France, KLM and Transavia). It was pleased to have transported 6.2% more passengers between January and March than at the same time in 2023, i.e. 20.8 million, and to see its revenue per passenger increase, for a turnover total up 5.1% to 6.7 billion euros, according to a press release.
Lack of profitability
But, as in the fourth quarter of 2023, which had already ended in a net loss, Air France-KLM failed to take advantage of the increase in attendance, which has continued to recover since the end of the Covid pandemic. -19. Elements of explanation: the increase in costs weighed on operating profit by 243 million euros, between an increase in the prices of spare parts, supply difficulties and a salary agreement at KLM estimated at 50 million euros.
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More unusual, another 50 million was spent on compensation for passengers affected by flight delays or cancellations, witnessing the disruption to the company’s operations.
