Air France-KLM sees the biggest loss since the corona pandemic with a 480 million euro deficit.
The European aviation sector remains vulnerable, as shown by the recent financial results of Air France-KLM. The company recorded a loss of 480 million euros in the past quarter, the highest since the corona crisis. This loss is largely due to geopolitical tensions affecting aviation routes and the supply of aircraft parts.
Rising salary costs and disappointing freight revenues also contributed to the financial setback. Despite these challenges, the airline managed to register a 6,2 percent increase in passenger numbers, with a total of approximately 20 million travelers. KLM, part of the group, even reported a growth of almost 18 percent in the number of passengers transported.
Marjan Rintel, KLM's CEO, highlighted the range of problems that society is facing this year. “From bad weather to long delivery times of parts, these are challenges that put us to the test. We are also faced with staff shortages that do not make things any easier,” says Rintel.
The financial results were also substandard at Brussels Airlines, another player in European aviation. The company closed the first quarter with an adjusted EBIT of -58 million euros. Although a negative first quarter is not unusual due to the traditionally lower demand for air travel, Brussels Airlines emphasizes that strikes and social unrest put additional pressure on its financial performance.
Nina Öwerdieck, Chief Financial Officer at Brussels Airlines, commented on the impact of the strikes: “Any threat of strike has immediate consequences for our bookings. The uncertainty makes customers reluctant to book, and it causes a lot of stress for those who have already booked.” She added that an agreement has recently been reached on air crew wages, contributing to a more stable future.
Although the results are disappointing, both airlines remain ambitious with plans to improve their performance. Brussels Airlines aims for a better annual result in 2024 than in 2023, despite the challenging start.
The aviation sector is known for its sensitivity to external factors such as economic fluctuations, political instability and now health crises such as the pandemic. The recent results of Air France-KLM and Brussels Airlines highlight this vulnerability as the companies look for ways to overcome the turbulence and return to profitability.
Lufthansa
In addition to the financial setbacks of Air France-KLM and Brussels Airlines, Lufthansa is also experiencing significant financial problems, with an announced quarterly loss of 273 million euros. The German aviation company, one of the largest in Europe, is facing reduced revenues and rising costs, mainly caused by recent strikes. These strikes not only had a direct impact on business operations, but the cost of compensation to passengers also increased expenses.
The challenges don't stop there. The decline in freight transport further puts pressure on Lufthansa's financial health. In response to these developments, the company is announcing significant measures, including cutting costs, ceasing new projects and considering a corporate reorganization.
