Sharp improvement in operating result for first quarter 2022 KLM Group
The recovery that set in during the second half of 2021 continued strongly in the first quarter of 2022. During the first three months of 2022, KLM succeeded in generating positive operating results (of +€3 million) for the third consecutive quarter. This represents an improvement of €340 million in comparison with the same period last year. There is still a long way to go to full recovery, but the current financial situation means that KLM has started to repay its loan package in the second quarter.
Turnover in the first quarter of 2022 amounted to €1,903 million; more than double that of 2021, when turnover totalled €930 million. Operating profits of €3 million were up €340 million in comparison with 2021, when there was a loss of €337 million. Bookings continued to pick up thanks to an increasing number of countries relaxing entry restrictions. The negative impact of the sharp increase in oil prices was mitigated by hedging.
KLM received its last contribution of €140 million under the emergency job-retention scheme (NOW) in the first quarter (previous year: €321 million), which contributed to the positive results.
Only €942 million was withdrawn from the loan package of €3.4 billion in 2020. And, as was also the case for 2021 as a whole, nothing was withdrawn in the first quarter of 2022. The repayment in the second quarter is €311 million, which reduces the outstanding debt of this loan package from €942 million to €631 million. If recovery continues, KLM may make further repayments later this year.
Improvements in all business areas
The first quarter of this fiscal year showed a mixed picture. Our customers are keen to travel again and are now able to, and this is reflected in the results. In total, we welcomed 4.8 million passengers on board, compared to 1.4 million in the first quarter of 2021. The upward trend in bookings continued despite the conflict in Ukraine and the closure of Russian airspace, forcing flights to and from South Korea, China and Japan to make a detour.
Once again, Cargo performance was excellent in the first quarter. Transavia also performed well, benefiting from the further relaxation of entry restrictions affecting holiday destinations. Engineering & Maintenance (E&M) showed a strong improvement in first-quarter turnover.
At the same time, key markets in Asia are still closed to international travellers. Additionally, the global airline industry is facing rising costs and scarcity in the labour market, which are putting pressure on operations. This also applies to KLM.
Operation under pressure despite commitment of KLM staff
Operations were already under pressure in the first quarter of 2022 due to numerous operational changes and scarcity in the labour market. This did not lead to any major disruptions. However, with steadily increasing passenger numbers and the situation at Schiphol in terms of capacity shortages in many places, the past few weeks have been very difficult for operations. Many thanks for all the efforts of KLM colleagues and sincere apologies to our customers who were inconvenienced.
These first quarter figures clearly give cause for optimism. Despite geopolitical tensions, high inflation and rising costs, recovery continues unabated. Bookings are approaching their 2019 levels, and our customers are keen and able to travel with us again. We will start repaying the loans in the coming (second) quarter. This involves an initial amount of €311 million and hopefully more later this year. This is a very important step in many ways, serving to highlight the resilience and commitment of all KLM colleagues. In the coming period, we will be focusing on repaying the loans on one hand, and operations and work pressure on the other. Numerous measures are being adopted in this regard, so that summer will be better than the situation in recent weeks.