I've covered time and time again here on FMP how civil aviation and air travel have thankfully recovered all lost ground caused by covid. Airlines are more consistently reaching better operating margins and are also generating profits at the end of the financial year. That is exactly the case of the Air France-KLM Group and their 2023 financial year. The group released its 2023, so let's take a closer look at the key released data.
Air France-KLM Group 2023 Passenger Figures
Air France-KLM Group wrapped up the year with some very healthy figures. Most traffic and financial indicators were green from the franc-dutch airline group.
The group as a whole transported over 93.5 million passengers over the entire 2023 solar year. That figure translates to an increase of passengers of 11% over 2022. A level which is inching closer to 2019 levels. The 2023 pax result brought Air France-KLM at 90% of 2019 levels in terms of passengers carried.
That 93.5 million passenger figure is up compared to 2022 by 12.3% with the tightly related RPK (revenue passenger per kilometre) up by 13.7%. Those two figures are growing faster than the ASK (available seat per kilometre) which was up by 9.5%. In essence the airline group is growing its number of passengers faster than it increasing its capacity on its network. A very positive piece of data to keep load factors as high as possible and making the most of each and every flying plane.
Looking forward to 2024, the group hopes to increase its ASK by further 5%. That will be achieved by increasing frequency and up-gauging from smaller planes with new fleet additions. I'm sure the goal is also to stay ahead of the ASK growth with the RPK metric, although that won't be the easiest of tasks.
Speaking of load factors that metric is also up on 2022. On average Air France-KLM group planes flew 87.3% full in 2023. That is up by 3.3 points compared to the previous year.
Operating Margins And Revenue Looking Healthier For 2023
If passenger figures look good, RPK figures do too the bottom line of the financial results is also positive for 2023. The Air France-KLM Group closed the year with:
| 2023 Results | 2023 | Change | Air France | KLM |
|---|---|---|---|---|
| Revenues (€m) | 30,019 | +13,7% | 18,518 | 12,050 |
| EBITDA (€m) | 4,208 | +593 | 2,657 | 1,572 |
| Operating result (€m) | 1,712 | +519 | 1,085 | 650 |
| Operating margin (%) | 5,70% | +1,2pt | 5,90% | 5,40% |
| Group Net income (€m) | 934 | +206 | ||
| Group Net Debt (€bn) | 5,041 | -1,300 |
Important pieces of data are the fact that the airline had a good operating margin close to 6% (5,7%) and that the overall debt has gone down from 6,3 billion euros to 5,0.
Margins could have been even better if not for the issues Air France came across during the year in subsaharan Africa. The French national carrier was banned from overflying Niger which made its flights to southern Africa more expensive and in turn eroding margins.
Transavia Burns It All in Q4
Transavia, the group's low cost carrier, is the only carrier of the group not to have made any money in 2023. The LCC was riding in positive operating margin territory until Q3 of 2023 only to burn it all in the notoriously complicated European aviation Q4. It is no surprise that Transavia burnt through so much of its margin in the last quarter of the year. It is extremely common for European LCC to lose money in the last 3 months of the year. There aren't as many people traveling and it difficult to charge the amount needed to make a profit on tickets.
The carrier lost 97 million Euros in 2023 but that is still an improvement of 2 million over 2022.
Setup For an Even Better 2024?
Potentially 2024 should be the year Air France-KLM as a group surpass 2019 levels both in terms of passenger traffic and revenue/profits.
France will be holding the summer Olympics which will bring a huge number of travelers to Paris, possibly aboard Air France or KLM flights.
The group is investing heavily in its fleet to renovate it, rejuvenate it and make it more efficient all while growing it in unit numbers. In 2023 the size of the combine AF-KLM fleets grew by 29 by adding:
- 3 Boeing 787-10
- 7 Airbus A350-900
- 16 Boeing 737-800
- 16 Airbus A220-300
- 4 Embraer E195-E2
- 2 Embraer E190
These aircraft above replaced and enhanced the outgoing:
- 3 737-700
- 3 A321
- 2 A320
- 6 A319
- 3 A318
- 3 E170
- 4 CRJ1000
Only time will tell if the ambitions of the largest European SkyTeam airline will become reality or just remain a pipe dream. First checkpoint, 2024 Q1 results.
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