Air France-KLM eyes profitable summer as premium demand returns

Air France-KLM is expecting a strong summer after reporting better than expected results for the first quarter. 

The Franco-Dutch airline group recorded earnings before interest, tax, depreciation and amortization (EBITDA) of €221 million ($234 million) for the first three months of 2022, compared to a loss of €628 million ($665 million) one year ago.  

“The performance of the Air France-KLM Group over the first quarter of 2022 confirms that recovery is here,” commented Chief Executive Benjamin Smith. “In spite of a challenging context, with the continued effect of the Omicron variant, the situation in Ukraine and the sharp increase of fuel prices, the Group posted once again a positive EBITDA and recorded strong bookings for the following quarters.” 

Smith said March was “very encouraging”, and that the group had seen an increase in demand for corporate and premium tickets, adding to recovery already seen in leisure bookings.  

Air France-KLM made operating profit of over €30 million ($32 million) in March, while its planes were 80% full, in both premium and economy classes.  

“This paves the way for a successful summer season in all our activities, which we continue to strengthen through our extensive transformation plan,” he said.  

In terms of schedule, Air France-KLM plans to fly around 85-90% of its pre-pandemic capacity during the peak summer months. It expects yields, a measure of ticket prices, will be above 2019 levels. 

On the profit side, the group expects to break even in the second quarter and produce a “significantly positive” operating result for the key third quarter.  Its operating result in the first quarter came in at a loss of €350 million ($371 million). 

The carrier said it was still considering measures to strengthen its balance sheet, including refinancing some of its assets and a capital increase. These measures could be worth up to €4 billion ($4.2 billion).