Labour shortages create travel disruptions in 2022, but Air-France KLM reports a significant increase in profits. The first holiday season without COVID-19 restrictions has been marred by a lack of available workers, causing headaches for travelers worldwide. However, Air-France KLM managed to overcome these challenges and achieve impressive financial results.
Benjamin Smith, the chief executive officer of Air-France KLM, expressed relief at the improved situation at airports this summer, including their hub at Amsterdam Schiphol Airport. Smith also emphasized the importance of this season as a test run for the upcoming 2024 Olympic and Paralympic Games in France, which will attract a massive influx of visitors to the French capital.
Despite the labor shortages, Air-France KLM’s operating profit surged by 347 million euros to reach 733 million euros compared to the previous year. This exceeded the company’s own projected figure of 663 million euros. The airline attributed this growth to a combination of lower jet fuel prices and higher yields, which compensated for inflation and resulted in a higher profit margin of 9.6%.
During the second quarter, Air-France KLM served 24.7 million passengers across its network, representing a capacity level of 92% compared to 2019 levels. This figure remained consistent with the group’s performance in the first quarter. Notably, the revenue per available seat kilometer (ASK) grew by over 12% compared to the same period in 2022. The increase was driven by the airline’s long-haul network and overall performance across their routes, with the exception of Asia.
Looking ahead, Air-France KLM confirmed its capacity outlook for the rest of the year, which was previously narrowed down to around 95% in May. Despite strong summer bookings, the company cited delays in new aircraft deliveries as a factor that may impact their capacity. However, discussions with Apollo for funding a new commercial partners arm are underway.
These positive financial results and the successful management of labor shortages position Air-France KLM as a resilient and profitable airline in the challenging post-pandemic travel landscape. While the labour shortages continue to pose challenges for travelers, the company’s ability to adapt and thrive under such conditions is a testament to their resilience and commitment to customer satisfaction.
