The KLM Group has reported a decline in its operating result despite a 5,4% increase in revenue, according to its 2024 financial results.
The operating result (Earnings Before Interest and Taxes) decreased by €234 million (R4,6 billion) to €416 million (R8,2 billion) compared with €650 million (R12,9 billion) in 2023.
According to the airline, profitability was under pressure due to rising costs of equipment, personnel, and airport fees.
“Our financial performance for 2024 is disappointing, especially considering that the operating result largely consists of cost savings. We need to strengthen our financial position in order to be able to make vital investments in the coming years,” said Bas Brouns, CFO of KLM.
KLM Group's annual revenue amounted to €12,7 billion (R252,1 billion), an increase of around 5% compared with 2023.
Revenue in the fourth quarter increased to €3,1 billion (R61,5 billion) compared with €3 billion (R59,5 billion) in 2023, with the operating margin increasing to 1,6%. Costs, excluding fuel, remained high.
“We are still not operating at 100% of our flight capacity and costs continue to rise sharply. As a result, we run the risk of not earning enough to keep investing in our future, although I’m confident that our plans will help us to improve our operations and finances for the long term,” said Marjan Rintel, CEO of KLM.
Measures to increase earning capacity include extra seats on the newest Embraers, and adjustments to the cabin layout of the Boeing 777-200. A new catering proposition on European flights is being tested, offering passengers more choice and paid catering. The airline also announced a reduction of office (non-operational) jobs, to increase productivity and improve profitability.
