This week, KLM reported profits of €650m, which is a 56% dip compared to 2022, with Amsterdam Schiphol constraints to blame.
The Dutch carrier has had to contend with a lot over the last 12 months, as we will delve further into.
Without further ado, let’s get into it…
The Numbers That Dipped…
KLM reported a profit of €650m from revenues of €12.2bn.
In terms of profits, this is 56% lower than what was recorded in 2022.
Furthermore, revenue actually increased by 12.8% in that time, with operating margins dropping 1.2% to 5.4%.
So, despite the dip, KLM is in profitability, but of course, this could have been maximised more, as we will find out next.
Amsterdam Schiphol Constraints Hurt KLM…
In their financial results, KLM said the following on the dip in profits, blaming the capacity constraints in Amsterdam Schiphol:
KLM’s revenue grew by +12.8% on the back of improved operations, although not optimal yet due to supply chain, while operating margin stood at 5.4%, down -1.2pt compared to last year.”
“KLM was operating with capacity constraints and in the fourth quarter some disruptions occurred linked to the bad weather in Amsterdam and weighted on the operating result development.”
Such capacity constraints came from the Dutch Government wanting to cut the number of flights.
This ultimately got reversed by November, but had caused enough damage in that layer of uncertainty.
It wasn’t just the Dutch carrier who got affected, for example.
Furthermore, JetBlue did initially have their slots cut for the Summer 2024 program, but has since been reversed.
With things now being clearer, this should enable KLM to thrive further throughout 2024.
Overall…
Whilst profitability is still relatively high for KLM, they could do with making up the 56% shortfall somewhere.
Earlier this month, the Dutch carrier unveiled capacity increases from Amsterdam for the Summer 2024 program.
This, should in effect, help to cut that gap down, providing they get enough passenger and cargo revenue moving forward.
But for now, all eyes will be on how 2024 will perform for KLM.
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