Air France-KLM books profit despite airport chaos; Staff shortages a long-term problem
Aviation group Air France-KLM made a profit for the first time since the coronavirus crisis. Both KLM, which previously made an operating profit, and Air France were able to write their figures in black due to the strong recovery in demand for travel. The problems at airports and the airlines themselves due to staff shortages weighed down the recovery somewhat. The consequences of the staff shortages in aviation will be felt for a long time, new KLM CEO Marjan Rintel said.
The problems at airports did mean that Air France-KLM had to allocate 70 million euros for compensation for travelers. That is much more than usual and is primarily due to measures at Schiphol to prevent further problems. Air France-KLM expects to spend less on compensation in the third quarter. Many flights have already been canceled, so they expect fewer surprises.
Air France-KLM’s turnover rose sharply. The limited capacity in relation to the much higher demand meant that the airline group could charge higher prices for tickets. That was particularly the case on the transatlantic route, where many other parties had less capacity. Ticket orders in dollars were also welcome because the U.S. currency recently rose sharply against the euro.
On the other hand, Air France-KLM is still having a hard time in Asia. China and Japan are still largely locked to travelers. The group did achieve good results in Africa and the Caribbean. The freight branch also performed well. The demand for air freight remained strong after the coronavirus, but the capacity on the important routes to China, for example, did not grow because there were no more passenger flights going there.
In total, Air France-KLM achieved a turnover of 6.7 billion euros, compared to 2.8 billion euros a year earlier. Of this, the group kept a profit of 324 million euros. KLM generated a turnover of 2.8 billion euros and an operating profit of 262 million euros.
The good results and a share issue, among other things, ensured that Air France-KLM could further repay the state aid they received during the coronavirus pandemic. KLM’s debt is completely repaid. Air France repaid another 1.6 billion euros and expected to repay more in the third quarter.
The airlines expect to book a solid profit again this quarter and close the whole of 2022 profitably. Air France-KLM became somewhat more pessimistic about capacity in the third quarter. This adjustment is due to the restrictions Schiphol imposed on the number of passengers.
Although the problems at Schiphol are decreasing, the consequences of the personnel shortages in aviation will be felt for a long time, like elsewhere in society. New KLM CEO Marjan Rintel said that the Dutch airline is increasingly getting the current problems under control. “We are working on creating calm and stability. Is it good enough? No, not yet, but it is getting better every week,” she said.
Rintel, who took over the reins at KLM at the beginning of this month, ended up in a “pretty violent perfect storm.” She already apologized to customers because KLM could not offer the service that customers are used to.
Because KLM canceled some flights and sold fewer tickets, things are getting better. “If you have a predictable product, it becomes easier. There’s that calm and stability.” That is also much needed because the chaos that reigned from the May holiday was “difficult for many KLM colleagues” that Rintel spoke to in recent weeks.
KLM needs more colleagues. “We are working with all our might to recruit staff,” Rintel said. “But we also have to think about how we deal with this in the long term in aviation.”
Reporting by ANP