DALLAS – The Air France-KLM (AF-KL) group, which also includes low-cost carrier Transavia (HV), has reported its highest-ever Q4 revenue results and announced that full-year revenue now stands at €26.4bn (US$28bn).
Full-year net profits now stand at €728m (US$774m), while operating profits came in at €1.2bn (US$1.2bn). It marks the first profitable year for the airline since the pandemic.
Commenting on the results Group CEO Benjamin Smith said that despite various issues such as the war in Ukraine, Covid variants and operational disruption at airports across its network, “our Group and its airlines were able to successfully capture a strong demand for travel.”
Indeed, the airlines welcomed 83.3 million passengers, up 86.5% from the previous year. Capacity increased by 44.2%, while traffic was up by 104.6%.
State Aid Restrictions
It also announced that in April, the group would emerge from restrictions imposed by the Dutch and French governments as part of state aid issued to the two airlines during the pandemic. AF will pay back the remaining €1.2bn (US$1.2bn) French State Recapitalization Aid. At the same time, KLM ‘intends to exit the current Dutch State framework with banks & State loans being replaced by a Sustainability Linked Revolving Credit Facility.’
Part of these restrictions involved merger and acquisition activities. Their removal will likely reignite talks with Lisbon-based TAP Air Portugal (TP).
During a full-year earnings call, Mr Smith said, “We are really pleased the constraints have been removed – we can negotiate with confidence and more legitimacy with any opportunities that present themselves.
“TAP is of interest to us strategically – we like the base in Lisbon, we like their position in the Brazilian market.”
The airline group is now well-positioned as it moves into 2023. “We close out the year with a positive net income, having turned the page on Covid, and look to the future with confidence in our ability to address the challenges ahead,” Mr Smith added.
These challenges include Russian Air Space restrictions, which has added significant amounts of time onto flights to Asia for European airlines. KLM also continues to be impacted by operational issues at its Amsterdam (AMS) hub. Royal Schiphol Group, which operates the facility, said it was unclear when the airport would return to 2019 traffic levels, owing to the continuing operational difficulties and a 440,000 per year flight cap imposed by the Dutch government.
Featured Image: KLM Airbus A330-300 (PH-AKF). Photo: Adrian Nowakowski/Airways.