Another favourable quarter for the KLM Group in Q2 2022
KLM Royal Dutch Airlines posted positive operating results for the fourth time in a row in the second quarter of 2022. Profits came to €262 million, compared to a €185 million loss in the same quarter last year. In the first six months of 2022, the airline recorded positive operating results of €266 million on revenues amounting to €4.685 billion, a significant improvement due in part to the efforts of KLM employees. The figures show that customers are keen to fly with KLM again, both for business and for leisure.
Despite KLM’s strong results after the Covid-19 crisis, emotions remain mixed. Customers were greatly inconvenienced by major operational disruptions in May and June, two hectic and demanding months for our employees as well.
The sharp rise in passenger numbers, long queues at Schiphol security and shortages of KLM staff put heavy pressure on operations, especially in the months of May and June. It is a very unpleasant situation for both our customers and our employees. KLM was forced to cancel flights and impose a limit on ticket sales. The positive effects of these measures are becoming visible. Operations are manageable again, but unfortunately we have not yet returned to the standard of service that customers have come to expect from us.
Despite the enormous operational challenges posed by the recovery of the airline industry, millions of customers once again chose to fly with KLM and Transavia over the past six months. I am very grateful to them for that. At the same time, however, our operations are struggling with queues at Schiphol’s security checks, labour shortages and heavy workloads. We are doing our best to come up with measures that will alleviate the pressure.
In my initial meetings with members of our organisation, I saw how KLM employees are working hard, day-in and day-out, to deliver the standard of quality that customers have come to expect from us. They are doing this under very difficult circumstances at Schiphol and other airports. I am proud of all of them for their dedication and commitment.
While the figures are good, we must keep a tight rein on structural costs. That is vital to KLM’s financial health and will enable us to continue investing in sustainability and our product for customers.
KLM’s improved results enabled the airline to repay its government and bank loans, amounting to a total of €942 million, in three instalments in the second quarter of 2022. For the time being, KLM will retain the associated credit facility. KLM made no further use of the governmental emergency job-retention scheme (NOW) in the second quarter, but still owes a considerable sum in deferred income tax, with repayment due to start in October this year.
In total, the KLM Group welcomed 7.2 million passengers on board in the second quarter. The leisure business performed strongly, with Transavia recording higher revenues than in 2019. Cargo’s contribution towards the results remained substantial. Engineering & Maintenance (E&M) performed on par with last year and maintained its focus on cost control.
Operating profits came to €266 million in the first half of 2022 on revenues amounting to €4.685 billion. KLM did receive €138 million under the NOW scheme in the first quarter. Even without this support, it was a significant improvement in results compared to the same period in 2021, when the Covid-19 pandemic was at its height. KLM recorded revenues of €2.137 billion at that time, representing an operational loss of €522 million.
Thanks to the rapid return of passengers and the resilient cargo market, KLM has recorded positive operating results for the fourth quarter in a row. The first half of 2022 marks a significant improvement in comparison with the first six months of 2021. Costs are rising, however, owing to inflation and the steep hike in the price of oil. It remains vital to our profitability and competitiveness to continue focusing on structural cost savings.