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| THIRD QUARTER 2024 |
| Operating result stable at €1.2 billion excluding Olympic Games impact
Underlying Group unit revenue trend favorable |
- Group capacity increased by 3.6% compared to last year with load factor at 89%
- Group revenues at €9.0bn, up 3.7% compared to last year
- Unit cost at +3.4% compared to 2023 due to continued higher cost levels for staff, operation and maintenance at KLM. Firm measures announced to structurally improve KLM's operational and financial performance
- Operating result stood at €1,180m, with operating margin at 13.1%. Operating result equivalent to that of last year excluding Olympic Games unit revenue impact of €160m. One-time payment of €50m to Air France staff for successful operations during the event
- 9-months Recurring adjusted operating free cash flow at €23m
- Cash at hand at €9bn and Net debt/EBITDA ratio of 1.7x
- Acquisition of a 19.9% non-controlling stake in the share capital of SAS AB successfully completed
"The third quarter revealed mixed trends for the Air France-KLM Group. Revenue continued to rise, driven by increased capacity and strong underlying demand. However, operating income was significantly affected by the Paris Olympic Games, impacting Air France as previously stated. At KLM, persistent cost challenges spiked higher than anticipated, putting pressure on parts of its business model and reinforcing the need for more concrete structural improvements. These measures are aligned with the Group's ongoing transformation efforts aimed at further enhancing overall performance.
Beyond their financial implications, the Olympic Games provided a unique platform to demonstrate the Group's operational expertise and capabilities while offering unparalleled visibility for France as a destination. In the long term, this will be advantageous for the Group.
We also made further progress in our decarbonization initiatives, as evidenced by the signing of a major Sustainable Aviation Fuel (SAF) purchase agreement with TotalEnergies. This contract, one of the largest ever signed by the Group, highlights our commitment to fostering the development of SAF supply chains, which is a crucial lever in reducing our carbon footprint.”
Q3 Group unit revenue broadly stable
| Third Quarter | Year to date | |||||
| 2024 | change | change constant currency | 2024 | change | change
constant currency | |
| Group Passengers (thousands) | 27,855 | +3.5% | 74,470 | +4.6% | ||
| Group Capacity (ASK m) | 87,795 | +3.6% | 241,861 | +4.1% | ||
| Traffic (RPK m) | 78,367 | +3.1% | 212,570 | +4.0% | ||
| Group Passenger load factor | 89.3% | -0.4pt | 87.9% | -0.1pt | ||
| Passenger unit revenue per ASK (€ cts) | 8.78 | -1.0% | -0.8% | 8.22 | -0.2% | +0.3% |
| Third Quarter | Year to date | |||||
| 2024 | change | change
constant currency | 2024 | change | change constant currency | |
| Revenues (€m) | 8,979 | +3.7% | +3.8% | 23,582 | +4.3% | +4.7% |
| EBITDA (€m) | 1,896 | -97 | -65 | 3,241 | -366 | -271 |
| Operating result (€m) | 1,180 | -162 | -130 | 1,204 | -565 | -469 |
| Operating margin (%) | 13.1% | -2.4pt | -2.0pt | 5.1% | -2.7pt | -2.3pt |
| Net income (€m) | 824 | -122 | 510 | -711 | ||
| Group unit revenue per ASK (€cts) | 9.32 | -0.7% | -0.6% | 8.79 | -1.1% | -0.6% |
| Group unit cost at constant fuel, constant currency and excluding ETS | 7.97 | +3.4% | 8.29 | +3.0% | ||
| 30 September 2024 | 31 Dec 2023 | |
| Operating Free cash flow (€m) | 28 | |
| Adj. recurring operating free cash flow* (€m) | 23 | |
| Net Debt (€m) | 6,698 | 5,041 |
| EBITDA trailing 12 months (€m) | 3,842 | 4,208 |
| Net Debt/EBITDA ratio | 1.7x | 1.2x |
Third Quarter 2024: Operating result at €1.2bn and stable underlying unit revenue performance
In the third quarter 2024, Air France-KLM welcomed 27.9 million passengers which is 3.5% above last year. As capacity increased by 3.6% and traffic grew by 3.1%, the load factor was broadly stable compared to last year at 89%.
The Group unit revenue per ASK was down -0.6% at constant currency compared to last year. Cargo unit revenues per ATK was up +6.3% against a constant currency. On the passenger side, less international inbound traffic to Paris and less travel from France as a consequence of the Olympic Games, resulted in €160 million less passenger unit revenue. Corrected for this impact, the Group unit revenue was 1.4% positive.
The operating result was €162 million below last year standing at €1,180 million and was impacted by the Olympic Games impact (€160 million), an increase of the ex-fuel unit costs (€230 million), the latter almost fully compensated by an increase of unit revenues (€113 million) and a decrease of fuel & ETS unit costs (€100 million).
The Group unit cost1 per ASK is up 3.4% versus last year and was above the outlook provided during the Q2 2024 results presentation (+2% year-over-year).
The initially estimated 2% unit cost increase is coming from higher flight related cost and higher salary cost due to collective labor agreements at Air France (impact as per April 2024) and KLM (impact as per Q4 2023), and a one-time payment of circa €50 million to Air France staff rewarding the strong operational performance during the Olympic Games.
The additional 1.4 point unit cost was caused by difficult summer operations, mainly at KLM and Transavia, resulting in higher disruption cost (€65 million), the impact of Crowdstrike €25 million and lower capacity at Transavia (-3%).
Cash
For the first nine months, the Group reported an operating cash flow of €28 million, impacted by a negative working capital coming from the deferrals. Inherited from the pandemic, these deferrals correspond to the previously guided one time pension payment of €610 million by Air France in January 2024 to the Caisse des Retraites des Personnels Navigants (CRPN) as well as the social charges and wages taxes amounting to circa €120 million per quarter.
The net capex amounted to €2.5 billion.
Recurring adjusted operating free cash flow excluding deferred social charges and wage taxes and including lease debt and net interest payment amounted to +€23 million.
The cash at hand at the end of September amounted to €9.0 billion, a decrease of €1.5 billion versus the end of 2023 mainly due to the payment of deferred pension, social charges and wages taxes inherited from the pandemic. Net Debt / EBITDA ratio stood at 1.7x, which is within our ambition of 1.5x to 2.0x.
On the first of July the Group redeemed fully the July 2021 €300 million bonds (coupon 3%).
Sustainability
Transition plan and trajectory
Since 2019, Air France-KLM has accelerated its environmental transition and has set ambitious sustainability performance targets to highlight its sustainability commitments. The Group's ambition is to reduce its greenhouse gas (GHG) emissions by 30% by 2030 compared to 2019 (gCO2eq/RTK). The Group aims to achieve this goal through a combination of fleet renewal, operational measures such as eco-piloting, and the incorporation of at least 10% of more sustainable aviation fuel on all its flights. These ambitious targets go beyond regulatory obligations.
Sustainability key performance measures:
Fleet Renewal: Air France-KLM is committed to renewing its fleet with more fuel-efficient and less noisy aircraft. By the end of September 2024, 24% of its fleet was composed of new-generation aircraft, compared to 19% end of September 2023. The Group plans to increase this ratio to 80% by 2030.
Compared to previous generation aircraft the A220 reduces CO2 emissions by 20%, the A320neo family by 15%, and the A350 by 25%.
Since the end of December 2023 the following new generation aircraft were phased in, eight A350, five A320 Neo, seven A321 Neo, of which the first delivery to KLM in the third quarter, and five A220. In the same period the following old generation1 aircraft were phased out, one 737-800, three A319, one A320 and one CRJ-1000.
| 30 September 2024 | 30 September 2023 | Change | |
| New generation fleet2 | 24% | 19% | +5pt |
Air France-KLM and TotalEnergies have signed in September an off-take agreement for TotalEnergies to supply up to 1.5 million tons of more sustainable aviation fuel (SAF) to Air France-KLM Group airlines over a 10-year period, until 2035.
This agreement marks one the largest SAF purchase contracts signed by Air France-KLM to date. In 2022 and 2023, Air France-KLM was the world's leading SAF user, representing 17% and 16% of total global production respectively.
The Group adheres to a strict sourcing policy, committing to purchasing second generation SAF that do not compete with the human or animal food chain, that are RSB or ISCC+ certified for their sustainability, and that are not produced from palm oil and do not contribute to deforestation, and which reduce CO₂ emissions by at least 65% over their entire lifecycle-from production to combustion-compared to fossil kerosene.
2024 outlook
Capacity
The Group expects its capacity in Available Seat Kilometers for Air France-KLM Group including Transavia to increase by 4% in 2024 compared to 2023.
Unit cost3
For the full year 2024, the Group expects a unit cost increase of circa +3% compared to 2023 (previously +2%) as a consequence of the unit cost increase of +3.4% in the third quarter and higher than expected cost in Q4. Less capacity and additional maintenance cost on the component business, mainly at KLM led to this outlook revision. Firm measures announced to structurally improve KLM's operational and financial performance.
See for detailed information the unit cost slide in the outlook section of the results presentation.
Capex
Full year 2024 net capex expected to be at 3 billion euros (Previously below 3 billion euros) due to timing effects related to sale of assets which are expected to be executed in 2025.
2025: Proposed increase of the solidarity tax on flight tickets ('TSBA') in France would impact the Group's profitability and competitiveness
Currently discussed in the French Parliament for the 2025 budget, this increase of the aviation tax applicable to all flights departing from France would:
- result in higher fares reducing accessibility of air travel
- impact profitability due to limitation of price elasticity, preventing the full transfer of charges to customers
- hamper our ability to deliver our sustainability trajectory without any benefit to the environment unless collected tax is allocated to the decarbonation of the aviation sector
- further reduce the competitiveness of France-based carriers and increase competitive distortion.
- projected incremental tax of €280m
- €90m - €170m negative on the operating result
Schiphol airport recently announced a tariff increase of 41% as per April 2025. KLM Group estimates an EBIT impact in 2025 in the range of €65m - €110m.
Business review
Network result
| Network
| Third Quarter | Year to date | ||||
| 2024 | change | change constant currency | 2024 | change | change constant currency | |
| Traffic revenues (€m) | 7,047 | +1.8% | 18,805 | +1.6% | ||
| Total revenues (€m) | 7,351 | +2.0% | 19,646 | +1.7% | ||
| Salaries and related costs (€m) | -1,723 | +10.5% | -5,002 | +9.1% | ||
| Aircraft fuel, excl. ETS (€m) | -1,639 | -1.5% | -4,753 | -0.3% | ||
| Other operating expenses (€m) | -2,552 | +7.0% | -7,367 | +7.0% | ||
| EBITDA (€m) | 1,436 | -10.1% | 2,524 | -18.0% | ||
| Depreciation & Amortization (€m) | -537 | +5.9% | -1,535 | +6.2% | ||
| Operating result (€m) | 899 | -192 | -156 | 990 | -644 | -543 |
| Operating margin (%) | 12.2% | -2.9 pt | 5.0% | -3.4 pt | ||
Passenger network unit revenue impacted by Olympic Games
| Passenger network
| Third Quarter | Year to date | ||||
| 2024 | change | change constant currency | 2024 | change | change constant currency | |
| Passengers (thousands) | 20,499 | +3.3% | 56,261 | +3.5% | ||
| Capacity (ASK m) | 73,465 | +3.4% | 206,270 | +3.3% | ||
| Traffic (RPK m) | 65,526 | +3.2% | 180,744 | +3.4% | ||
| Load factor | 89.2% | -0.2pt | 87.6% | +0.1pt | ||
| Total passenger revenues (€m) | 6,783 | +2.1% | +2.3% | 17,959 | +2.9% | +3.4% |
| Traffic passenger revenues (€m) | 6,576 | +1.5% | +1.6% | 17,431 | +2.5% | +3.0% |
| Unit revenue per ASK (€ cts) | 8.95 | -1.9% | -1.8% | 8.45 | -0.8% | -0.2% |
The passenger network unit revenues were impacted by the Olympic Games in Paris. The international markets showed a significant avoidance of Paris while travel between the city and other destinations was also below the usual summer average as residents in France postponed their holidays. Unit revenues declined by 1.8% against a constant currency compared to last year, although excluding the Olympic Games impact the passenger unit revenues would have been 0.1% positive.
Passengers who were avoiding destination Paris and the fewer travelers from Paris due to the Olympic Games were as much as possible replaced by transfer passenger, which had a negative impact on the yield. During the third quarter we observed therefore per region the following trends:
North Atlantic
Q3 capacity increased by 4% compared with last year while load factor remained broadly stable at 90% (-0.5pt) and yield decreased by 2.8%.
Latin America
Capacity was down 1.3% on the back of a high comparison basis while industry capacity is increasing. Load factor slightly decreased and reached 92% while yield reduced by 2.4% compared to significant high yields last year.
Asia & Middle East
Capacity in Q3 has significantly increased by 9% while load factor increased by 0.5% and reached 90%. Yield decreased by 7.4% mainly driven by high competition from Chinese carriers and demand still lagging behind in Japan and China compared to pre-covid levels.
Caribbean & Indian Ocean
After Capacity decreases in the previous quarter, this quarter the capacity increased by 3.2%. Load factor decreased by 2.3 points while yield remained broadly stable (-0.5%).
Africa
Strong yields on late bookings resulted in a yield increase of 1.2% while load factor (+0.9 point) benefited from a lower capacity (-4.3%) than last year.
Short and Medium-haul
Positive developments on capacity, yield and load factor in Europe. Despite the capacity increase by 1%, the yield increased by 0.5% and the load factor by 0.6 point.
Cargo: Strong Q3 Unit revenues
| Cargo business
| Third Quarter | Year to date | ||||
| 2024 | change | change constant currency | 2024 | change | change constant currency | |
| Tons (thousands) | 226 | +3.5% | 661 | +3.3% | ||
| Capacity (ATK m) | 3,707 | +1.5% | 10,724 | +2.1% | ||
| Traffic (RTK m) | 1,687 | +3.1% | 4,936 | +3.3% | ||
| Load factor | 45.5% | +0.7pt | 46.0% | +0.5pt | ||
| Total Cargo revenues (€m) | 561 | +0.6% | +1.1% | 1,669 | -9.2% | -8.3% |
| Traffic Cargo revenues (€m) | 471 | +7.3% | +7.7% | 1,374 | -8.5% | -7.7% |
| Unit revenue per ATK (€cts) | 12.74 | +5.9% | +6.3% | 12.83 | -10.4% | -9.6% |
Today's air freight market is dynamic and Asia in particular is performing well driven by e-commerce and the Red sea disruption. In response to market dynamics, a part of the Group's full freighter capacity is being redeployed to Asia.
Transavia: Q3 Operating margin improvement despite Olympic Games impact
| Transavia
| Third Quarter | Year to date | ||
| 2024 | change | 2024 | change | |
| Passengers (thousands) | 7,356 | +4.1% | 18,208 | +8.0% |
| Capacity (ASK m) | 14,330 | +4.5% | 35,591 | +8.7% |
| Traffic (RPK m) | 12,841 | +2.7% | 31,826 | +7.4% |
| Load factor | 89.6% | -1.5pt | 89.4% | -1.1pt |
| Unit revenue per ASK (€cts) | 7.93 | +5.0% | 6.90 | +5.3% |
| Unit cost per ASK (€cts) | 6.35 | +2.9% | 6.65 | +2.4% |
| Total Passenger revenues (€m) | 1,118 | +10.3% | 2,424 | +15.2% |
| Salaries and related costs (€m) | -198 | +19.0% | -543 | +16.9% |
| Aircraft fuel, excl. ETS (€m) | -238 | -6.4% | -608 | +2.5% |
| Other operating expenses (€m) | -383 | +16.9% | -968 | +15.1% |
| EBITDA (€m) | 300 | +12.6% | 305 | +48.5% |
| Depreciation & Amortization (in €m) | -75 | -4.6% | -219 | +15.8% |
| Operating result (€m) | 225 | <
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