KLM Group: disappointing results due to high costs
KLM Group reports a 31 million euros operating loss in H1 2024 despite increased revenues, attributing the shortfall to high operational costs and insufficient staffing. New cost-saving measures are expected post-summer.
The article KLM Group: disappointing results due to high costs first appeared in TravelDailyNews International.
The KLM Group posted an operating loss of 31 million euros for the first half of 2024. While revenues were higher than in the same period last year, high costs caused results to lag. Without measures, this will not improve. KLM will therefore critically assess its investments, cost savings and opportunities to generate greater revenues. After the summer, KLM will present new measures.
“Our results fell short of expectations due to significantly higher costs. The operation was more stable, but capacity could not yet be fully utilised. The fleet could not be fully deployed. We have insufficient numbers of pilots and engineering staff and face long delivery times of spare parts. In the period ahead, the focus will be on cost control and improving our financial performance. We will soon announce additional measures for the entire company. This is a difficult message but essential for KLM’s future.” says Marjan Rintel, CEO KLM.
Bas Brouns, CFO KLM said “We are flying more than last year, but costs are rising faster than revenues. That is downright disappointing. The margin has to improve. We are already working on initiatives to work more efficiently, generate more revenue and cut costs. We are going to accelerate and expand this. Among other things, this means postponing the plan for KLM’s new headquarters. In addition, we are taking a critical look at other investments. We will also continue to reduce the growth in indirect staff.”
Results
Operational results for the first half of the year totalled minus 31 million euros, compared with plus 129 million euros for the same period in 2023. Revenues amounted to €6 billion, compared with 5.6 billion euros in the first six months of 2023. KLM welcomed close to 16 million passengers on board during the first half of the year.
During the second quarter, operations were more stable and customers therefore experienced fewer disruptions thanks to a package of operational measures, including spare fleet availability and hiring of sufficient numbers of colleagues company wide.
The KLM Group posted operational results of 260 million euros for the second quarter of 2024 on revenues of 3.2 billion euros. The result falls short of expectations due to high costs.
Activities
Engineering & Maintenance welcomed a lot of new technicians and its recruiting drive continues unabated. Revenues in the first half of the year were higher than for the same period in 2023.
At Cargo, greater demand for goods transport is supporting the recovery in revenues and earnings. However, recovery is still under pressure due to global supply chain issues. In order to stabilise our network further, more reserve capacity has been built in resulting in reduced fleet deployment.
Transavia also recorded higher revenues in the first half of the year. Transavia managed to enable holidaymakers to travel affordably under difficult conditions, generating positive results in the second quarter. In total, close to 4.5 million passengers travelled with Transavia in the first six months of 2024.
The article KLM Group: disappointing results due to high costs first appeared in TravelDailyNews International.