Air France-KLM second-quarter results improved, driven by strong revenue growth

In the second quarter of 2023 (Q2 2023), Air France-KLM’s revenues were up +14.1% compared to Q2 2022, driven by a higher capacity (+8%), a higher passenger load factor (+3 pt) and a higher passenger yield (+9%). The operating result improved compared to last year by €347 million while last year the operating result was supported by €42 million furlough contribution. A lower jet fuel price and a higher yield compensating inflation accelerated the growth in operating result and translated into a margin at 9.6%.

Compared to last year, net income strongly grew by €280 million, amounting to €604 million, supporting the equity restoration. The adjusted operating free cash flow in the second quarter amounted to €557 million, a reduction of €975 million compared to last year. This different pattern is explained by a catch-up in summer ticket sales in Q2. The net debt ended at €4.9 billion, an improvement compared to year end 2022 of €1.4 billion.

In the second quarter 2023, Air France-KLM welcomed 24.7 million passengers which is 8.2% above previous year. As capacity increased by 8.3% and traffic grew by 11.6%, the load factor increased by 2.6 points compared to last year. The Group reached a very strong group passenger unit revenue per ASK, up +12.3% compared to last year. This increase was driven by load factor increase especially on the long haul network (North America, Africa, Asia & Middle East and Transavia) and yield on the full network except Asia.

On July 27, 2023, Air France-KLM announced that it has entered into exclusive discussions with Apollo Global Management regarding the potential financing of €1.5 billion to a dedicated operating affiliate of Air France-KLM. This entity will hold the trademark and most of the commercial partner contracts related to Air France and KLM’s joint loyalty programme (Flying Blue), and will become the exclusive issuer of miles for the airlines and partners. This financing would be accounted as equity under IFRS, allowing Air France-KLM to make a further step towards its commitment to restore its equity and strengthen its balance sheet, aside from net profit generation and/or straight hybrid bonds. (£1.00 = €1.17 at time of publication).