It's that time of the year again, full year reports for 2024 are upon us with some extremely interesting insights. I'll try my best to cover all major airline reports, but it does take some time to get through these lengthy documents. Today we're looking at what Air France-KLM's 2024 looked like and how they hold up compared to 2023.
The Overview: Consistent Result With Positive Margin and Growing Passenger Figures
So let's start from the figure that we all look at first when glancing at an airline's full year report: operating margin. Overall the French-Dutch group wrapped up 2024 with a 5.1% operating margins which translates to a 489 million euro net income. Those two numbers are both down on 2023, respectively by 0.6% and 501 million euro. There's one culprit for that decline in growth, and surprisingly it's KLM (more on that later).
Overall the group carried as a whole (Air France, KLM and Transavia) over 97.955 million passengers in the entirety of 2024. Achieving a growth of 4.7% over the prior year.
The airlines increased the number of seats put out on the market by 3.6% over 2023 (ASK). What is positive is that traveler increase (RPK) outpaced the number of new seats sold. An indicator of that is also the 0.5% increase in overall load factor across the Air France-KLM group. Delving a little more on the load factor, for the entirety of 2024 it sat at 87.8%.
| 2024 Results | 2024 | Change | Air France | KLM |
|---|---|---|---|---|
| Revenues (€m) | 31,459 | +4.8% | 19,221 | 12,710 |
| EBITDA (€m) | 4,244 | +36 | 2,599 | 1,437 |
| Operating result (€m) | 1,601 | -111 | 980 | 416 |
| Operating margin (%) | 5.10% | -0.6pt | 5.1% | 3.30% |
| Group Net income (€m) | 489 | -501 | ||
| Group Net Debt (€bn) | 5.041 | +2.3 |
Transavia Marks Its First (slightest) Positive Result
In 2023, the trouble child was Transavia, which this year has gotten its ducks in a row. The Air France-KLM LCC managed to turn the smallest of profits and positive operating margins. Operating result was +3 million euro while margin was +0.1%. That might not sound all that impressive, however, it sounds a lot more if you consider the carrier lost 97 million euro in 2023.
The budget airline has been working hard to realize its medium term objectives and during 2024 has been onboarding new aircraft as part of its fleet renovation. The new planes are all ultra fuel efficient Airbus A321neo, which will eventually replace the Boeing 737s, and will help boost the carrier's operating margins.
Going back to figures, Transavia carried over 23.2 million passengers in the 2024 calendar year, which is an 8.1% growth over 2023. That figure almost perfectly aligns with the increase in available seats (ASK) which rose by 8.3% meaning that the airline was able to maintain a similar load factor, further helping achieve that historical breakeven result.
| 2024 Results | 2024 | Change |
|---|---|---|
| Passengers (m) | 23.205 | +8.1% |
| Load Factor | 88.7% | -0.4% |
| Revenues (€m) | 3,072 | +16.4% |
| EBITDA (€m) | 300 | +96% |
| Operating result (€m) | 3 | +100 |
| Operating margin (%) | 0.1% | +3.8% |
Air France: A Strong Result Despite The Summer Olympics in Paris
The Air France-KLM group had cautioned in last year's report that Air France's figures might feel a hit due to the summer Olympics being held in Paris. That might sound counterintuitive, however filling planes to Paris in the height of the summer seasonality is far from an issue, having a big event in the city can only disrupt incoming passengers and tourists.
However, despite the warnings and the Olympics disrupting the Parisian tourist high season, Air France's operating margin held up extremely well. Much better than KLM's operating margin as a matter of fact. Air France wrapped up the year with 5.1% operating margin which translates to an operating result of 980 million euros.
| 2024 Results | 2024 | Change |
|---|---|---|
| Revenues (€m) | 19,221 | +3.8% |
| EBITDA (€m) | 2,599 | -58 |
| Operating result (€m) | 980 | -105 |
| Operating margin (%) | 5.1% | -0.8pt |
KLM The Trouble Child of The Group in 2024
Surprisingly, KLM is the airline of the group which came home with the most disappointing results at the end of the year. Usually the Dutch flag carrier is very consistent and constant in achieving results, however that wasn't the case in 2024.
The airline is well aware of the situation and has already taken corrective action, by streamlining its operation in non-operational roles.
KLM wrapped up 2024 with a revenue of 12.7 billion euro but an operating margin of only 3.3% (down from 5.4% in 2023) or 416 million euro (down from 650 million in 2023) in operating result. Those figures sandbagged the overall Air France-KLM Group results for the year, that with a “usual” KLM performance could have been much closer to the 6% mark or even above it.
| 2024 Results | 2024 | Change |
|---|---|---|
| Revenues (€m) | 12,710 | +5.4% |
| EBITDA (€m) | 1,437 | -134 |
| Operating result (€m) | 416 | -234 |
| Operating margin (%) | 3.3% | -2.1pt |
Fleet Modernization Pushes Forward for the Air France-KLM Group
The group is investing heavily in modernizing its fleet. This is seen as a key piece of the puzzle to increase margins. Getting rid of fuel-hungry aircraft and replacing them with ultra fuel-efficient ones will allow to save on the single largest cost for any airline in the world: jet fuel.
In 2024 the group, across all 3 carriers, phased out:
- 2 A380
- 3 A330-200
- 2 Boeing 737-800
- 4 Boeing 737-700
- 1 A320
- 3 A319
- 2 CRJ-1000
- 1 E190
These planes were replaced with:
- 8 A350-900
- 10 A321neo
- 9 A320neo
- 9 A220
- 4 E195-E2
- 1 787-10
Other Areas Performing Well For the Air France-KLM Group
All other stems of the Air France-KLM Group performed well. Nothing that capable of moving significantly the needle as can the passenger operations. However Cargo operations, Maintenance and Flying Blue all came home at the end of 2024 with positive operating margins.
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