KLM Group records third-quarter profits under tough operating conditions
KLM Royal Dutch Airlines recorded operating profits of €443 million between July and September on revenues of €3.236 billion. It achieved these results under difficult operating conditions, with both customers and employees feeling the impact.
A surge in the demand for tickets in the summer saw revenues rise to 2019 levels, even though the airline operated fewer flights due to staff shortages at Schiphol security, network interventions by KLM itself in response to staffing issues, and problems in the parts supply chain that led to aircraft spending more time in the hangar. As a result, capacity in the third quarter was about 80% of that in the same period of 2019.
KLM was forced to take drastic measures to manage operations, for example restricting ticket sales to passengers departing from Schiphol and cancelling flights. The airline will continue pursuing these measures in the period ahead to improve network predictability. The essence was and remains: to ensure that every customer who books can fly.
KLM and Transavia carried a total of 9.5 million passengers in the third quarter. Cargo performed well despite having less belly capacity available, and Engineering & Maintenance (E&M) welcomed back customers. Taken together, these factors led to operating profits of €443 million in the third quarter of 2022, compared to €169 million in the same quarter of 2021. Revenues stood at €3.236 billion compared to €1.890 billion in 2021.
On the cost side, KLM faced sharp increases in the past quarter, due in part to the high oil price, inflation, supply chain shortages and costs associated with rebooking and compensating passengers affected by network interventions. Since the start of Schiphol’s security issues in April, which continued through September, direct costs alone have amounted to almost €70 million, compounded by the loss of revenue.
The appetite for travel is as strong as ever and KLM makes it possible. These third-quarter figures are courtesy of our customers and employees, who are doing their jobs under difficult circumstances. We’ve taken a number of steps to give our customers more certainty and to lighten employee workloads and should see the effects in the period ahead. At the same time, these measures are costing KLM a great deal of money and limiting the number of flights we can operate. We hope this will improve very soon and we’re working hard to make that happen.
KLM has posted operating profits for the fifth quarter in succession. We’re seeing that customers still want to travel and that cargo flows can be maintained thanks to our network strategy, all despite rising inflation, the high oil price and the unfavourable dollar exchange rate. Given these trends and developments, we must remain focused on cost control.