29
February
2024
|
07:18
Europe/Amsterdam
KLM reports strong annual results for 2023; limited fleet and runway capacity in Q4
Summary
KLM generated EUR 12.1 billion in revenues in 2023, with operational profits of EUR 650 million. This is a record turnover despite profits being under pressure compared to 2022.
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The past year was dominated by KLM’s ongoing recovery. We continued the introduction of Premium Comfort Class and the new World Business Class seats. As a group, Air France-KLM decided to invest heavily in a new generation of long-haul aircraft, the Airbus A350, which is cleaner, quieter and more fuel-efficient than its predecessor. Although KLM fared better operationally in 2023 than in the previous year, we still faced hurdles. We had to reduce capacity, firstly, due to persistent global supply chain issues, and secondly, because we are making up for lost ground in the recruitment of engineers and pilots. Unfortunately, this meant we were not always able to meet customer expectations. Stable, manageable operations remain our priority in 2024. To this end, we’ve introduced measures that will bear fruit in the months ahead.
Marjan Rintel, Chief Executive Officer
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Figures for the fourth quarter and year
The KLM Group’s annual revenues amounted to EUR 12.1 billion, compared to EUR 10.7 billion in 2022. Operating profits totalled EUR 650 million, compared to EUR 706 million in 2022.
KLM had to cancel flights in the fourth quarter due to limited runway capacity at Schiphol, caused by bad weather, and due to reduced fleet deployability. Rebooking and compensating customers, and hiring additional aircraft, increased costs. Geopolitical tensions also persisted, which meant that KLM continued to bypass Russian airspace. This led to a need for more pilots in the cockpit on some Asian flights. At Cargo, supply exceeded demand in the fourth quarter, which also put pressure on results.
These factors led to an operating loss of EUR 18 million in the fourth quarter, compared to an operating loss of EUR 2 million in 2022. Revenues in the fourth quarter amounted to EUR 3 billion, compared to EUR 2.8 billion in 2022.
More contented passengers
Thanks to the tremendous efforts of all KLM employees, customer satisfaction expressed in the net promoter score (NPS) rose from 37 to 39 in 2023. KLM carried 30.3 million passengers to their destinations in 2023. Transavia welcomed 8.9 million passengers aboard its flights and took delivery of its first Airbus A321neo in December. This innovative aircraft type will contribute to achieving the sustainability goals of the entire KLM Group.
At Engineering & Maintenance (E&M), hundreds of new employees were recruited to address staff shortages and we will continue hiring in 2024. Revenues continued to recover at E&M in 2023.
At Cargo, revenues have returned to pre-Covid levels, but they are coming under pressure due to the slowdown in global trade.
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Financially, 2023 was a solid year for KLM. We generated revenues of EUR 12 billion, strengthened our financial position and reduced our net debt to EUR 1.35 billion. We invested heavily in the fleet, in more sustainable fuel and in IT, for the long term. Operating profits came under pressure as costs rose, while we were still operating below pre-Covid capacity. To finance planned investments, KLM aims to improve profit margins over the next three to five years. We look to the future with confidence, as demand for air travel continues to be strong.
Erik Swelheim, Chief Financial Officer
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