KLM Group annual figures: Financial recovery in uncertain times
KLM Group posted an operating profit of EUR 706 million on revenues of EUR 10.7 billion in 2022 with an operating margin of 6.6%. Issues during operational ramp-up prevented KLM from delivering the level of service to which customers are accustomed and employees faced major challenges. The figures nevertheless show that customers are eager to continue travelling.
The annual figures bring KLM Royal Dutch Airlines closer to its 2019 results, an achievement that can be attributed to the rapid recovery in the demand for travel after Covid-related travel restrictions were eased in early 2022. Even so, KLM will be facing a number of uncertainties in 2023. Geopolitical tensions, inflation, a possible recession and the high price of fuel could all impact its financial performance.
We have achieved these results thanks to the loyalty of our customers and the commitment of all colleagues. Our employees have made an enormous effort over the past year to offer customers quality under difficult circumstances. Major challenges remain, but the 2022 results give us reason to be cautiously optimistic. We are indebted to our customers and our dedicated employees for this. The Dutch are eager to continue flying and we see more people travelling worldwide. At the same time, we have uncertainties to reckon with, such as inflation, the price of fuel and scarcity in the labour market. We will continue to invest in customer products and services in the years ahead, with an emphasis on sustainability, but we can only do so if we exercise systematic cost control. This is how we can prepare KLM for the future and offer our customers memorable experiences.
KLM exceeded expectations in all its markets in 2022, with the exception of Asia, where Covid-19 restrictions continued to impede recovery, specifically in China. Cargo once again made a major contribution to KLM’s performance. E&M also recovered, despite longer delivery times for parts. Transavia had a great summer, with revenues returning to pre-Covid-19 levels.
KLM welcomed 25.8 million passengers on board last year and Transavia 7.7 million. Due to operational problems at Schiphol and KLM’s own labour shortages, the customer experience rating was 37, well below the NPS target of 50. Now that calm has largely returned to Schiphol, we are pleased to see our NPS rising again. Customers responded positively last year to the introduction of our new Premium Comfort Class on intercontinental flights.
Once travel restrictions were lifted at the start of the year, the demand for air travel recovered quickly. This enabled KLM to repay the loans it received from the Dutch government as part of its support package in the second quarter of 2022. However, KLM has yet to repay EUR 1.4 billion in deferred wage tax. Because we welcomed more customers on board, passenger load factor rose to 84%. This bodes well for the year ahead, when we will be forced to contend with ongoing geopolitical tensions and other prohibitive factors. During the second quarter of this year, we expect to terminate the loans guaranteed by the Dutch state and replace them with a credit facility with our relationship banks.
KLM continued its drive towards operational sustainability in 2022. For example, we made it standard practice to add 0.5% sustainable aviation fuel (SAF) to the fuel systems of flights departing from Amsterdam and doubled that amount to 1% as of this year. KLM also signed supply contracts with two SAF producers, taking it a step closer to its goal of adding 10% SAF for all flights worldwide by 2030. KLM further entered into partnership with Thalys to improve its air/rail transfer product on the Brussels-Amsterdam route. And finally, the Science Based Targets initiative (SBTi) approved KLM’s CO2 emissions targets, ensuring that it complies with the Paris Agreement on climate change.