The French Dutch aviation giant is seeing its operating profit drop again. It has long been known that the aviation group has been making losses on various levels and that the French branch in particular, Air France, is largely responsible for this.
EUR 1.1 billion. This is the operating profit that Air France-KLM made last year (2019). This huge figure seems high, but if we compare it with the result of 2018, we can show that this is a decrease of 264 million euros. In addition, the revenue did increase to 27.2 billion euros.
If we zoom in further on the group itself, we see that Air France’s operating result is down 41 million euros on the previous year. This means 280 million euros for a turnover of 16,5 billion euros. Dutch KLM, on the other hand, achieves much higher figures. The operating result there rose to no less than 853 million euros. This is also a deterioration compared to the previous year. KLM’s turnover was only 11 billion euros, which certainly indicates greater efficiency. In total, the group achieved a net profit of 290 million euros. About 130 million less than in 2018. This loss is mainly due to higher fuel costs and a difficult aviation market. Towards the end of 2019, the Corona virus continued to have a significant impact on results.
The group itself
Within the group itself, tensions have been noticeable for some time now. We’re not surprised if you look at what Air France has left of the 16.5 billion euros compared to KLM. The gap between the results is too big, according to Pieter Elbers, CEO of KLM. To solve this, Air France has started a transformation process to narrow this gap and thus reduce the high costs. For example, AF, like KLM, should use one type of aircraft to operate short flights.
Looking at the number of seats on offer, we note that capacity increased by 2.9 percent. In addition, the entire group, including Transavia, welcomed some 104.2 million passengers throughout the year.
For 2020 it doesn’t look very rosy either. Due to the Coronavirus outbreak in China, many airlines tend to cancel flights to and from Europe. Also from AF-KLM this is no different. Normally the flights would have been restarted on 9 February, but this date has been postponed to 15 March. Then KLM will start again with a few flights to Shanghai and Beijing. Air France would follow about the same arrangement. After 28 March, all flights, from both companies, to China would have to be operated again according to the normal flight schedule.