Air France-KLM has released its 2024 financial results, revealing a year marked by robust performance and strategic expansion.
The aviation giant concluded the year with a powerful fourth quarter, propelling its full-year operating result to a commendable €1.6 billion. This translated to a 5.1% operating margin.
This performance underscores the group’s continued strategic focus amidst prevailing industry challenges.
Q4 Highlights: A Surge in Revenue and Profitability
The final quarter of 2024 witnessed a significant surge in Air France-KLM’s financial metrics. Group revenues reached €7.9 billion, a 6.4% increase compared to the previous year.
This growth was fueled by a favorable business environment, resulting in a 4.4% rise in unit revenue, despite a modest 2.2% capacity increase.
The operating result for the quarter stood at €396 million, a substantial improvement of €453 million over the same period last year. It yielded a 5.0% operating margin.
However, unit costs also saw an uptick of 4.0%. This was attributed to factors such as increased airport and air traffic control charges, salary adjustments, capacity mix effects. The group’s focus on premium cabin offerings was also a contributing factor.
Full Year 2024: Steady Growth and Strategic Investments
For the entire year, Air France-KLM reported revenues of €31.5 billion, a 4.8% increase driven by a 3.6% capacity expansion, stable unit revenue, and growth in third-party maintenance revenues.
The full-year operating result reached €1.601 billion, with an operating margin of 5.1%. Unit costs rose by 3.2%, primarily due to premiumization, haul mix, and salary increases.
The group also demonstrated strong financial discipline, generating a positive recurring adjusted operating free cash flow of €271 million.
Its leverage, measured by the net debt-to-EBITDA ratio, stood at 1.7x, aligning with its medium-term target range.
Looking Ahead: Expansion and Transformation
For 2025, Air France-KLM anticipates a capacity increase of 4-5% compared to 2024. Unit costs are projected to rise in the low single digits.
The group plans net capital expenditures between €3.2 billion and €3.4 billion, reflecting its commitment to fleet renewal and strategic investments. The leverage target remains within the 1.5x to 2.0x range, consistent with its medium-term objectives.
The group reiterated its 2026-2028 medium-term outlook, signaling confidence in its long-term strategy.
CEO’s Perspective
Air France-KLM Group CEO, Benjamin Smith, expressed satisfaction with the year’s performance, particularly the strong fourth-quarter results. He acknowledged the operational and external challenges faced throughout the year, emphasizing the group’s unwavering commitment to customer-centric service and sustainability initiatives.
Smith highlighted the group’s strategic expansion, including the introduction of new routes and the strengthening of partnerships, notably the acquisition of a minority stake in SAS.
He also noted the unique opportunity presented by the Olympic Games to showcase the group’s operational expertise and France as a premier destination.
Looking forward, Smith emphasized the continued focus on strategic roadmap execution and transformation.
He reiterated confidence in achieving the group’s medium-term ambitions through disciplined capital allocation and cost efficiency.
Key Takeaways:
- Air France-KLM delivered a strong financial performance in 2024, driven by robust revenue growth and strategic initiatives.
- The group’s focus on premiumization and operational efficiency contributed to its success.
- Strategic partnerships and investments, including the SAS stake, are key drivers of future growth.
- The group is committed to sustainability through fleet renewal and SAF initiatives.
- Air France-KLM’s outlook for 2025 is positive, with a focus on capacity expansion and continued transformation.
- Strong financial discipline, as seen in the leverage ratios, allows the group to move forward confidently.
Click the banner to subscribe to our weekly newsleter.
Click the photo to join our WhatsApp channel so then you can stay up to date with everything going on in the aviation industry!
