Air France-KLM: ‘Solid’ Corp. Traffic Recovery

Air France-KLM during the second quarter witness a dramatic spike in travel demand but faced disruptions at airports the globe, including London’s Heathrow and Amsterdam’s Schiphol—KLM’s hub, the carrier reported Friday. Each of those airports have instituted capacity caps.

“The strong recovery we see this summer is putting the entire aviation industry to the test,” Air France-KLM CEO Benjamin Smith said in a Friday quarterly earnings statement. “While Air France-KLM had prepared for close to pre-pandemic demand levels, our airlines are not immune to the major operational challenges taking place around the world. Customer satisfaction is at the top of our priorities, and we know we have not fully been able to deliver the quality of service that has come to be expected from us.”

Still, the solid demand resulted in Air France-KLM reporting quarterly net income of €324 million (US$330 million) on total revenue of €6.71 billion, up from a loss of €1.49 billion on revenue of €2.75 billion one year prior. Passenger revenue for the quarter was €4.84 billion.

Air France-KLM capacity for the second quarter was 82 percent of Q2 2019 levels. The company anticipates capacity to be in the range of 80 percent to 85 percent for the third quarter and in the range of 85 percent to 90 percent for the fourth quarter, with a full-year average of about 80 percent.

The “spike” in travel demand, the strong performance in premium cabins and corporate-traffic recovery all led to a yield above the 2019 level in the second quarter, according to the company. In particular, corporate travel “ramped up quickly” in South America, and “a strong corporate recovery was observed in all areas” for Africa. The North Atlantic region reported overall strong traffic recovery, with new bookings outpacing 2019 levels.

In response to rising fuel prices and “other external costs,” the company added different fare increases during the first half of the year across all long-haul flights, according to Air France-KLM. The amount of the increases varies according to destination and class of travel, and applies to flights operated by Air France and KLM.

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