Air France-KLM Sees Strong Second Quarter Despite Operational Challenges

Operational difficulties arose in Europe and the United States, mainly due to labor shortages at airports, lots of flight cancellations and understaffed airports grappling with mountains of lost luggage. According to Business Insider over the past seven years, 2022 had the highest percentage of delayed flights (19 percent) and the highest percentage of canceled flights (4 percent), excluding 2020.

Despite these problems, however, according to American Express, 74% of respondents are willing to book a trip for 2022 even if they might have to cancel or modify it later and 62% of respondents agree that they plan on taking 2-4 trips in 2022. Due to these very positive results on tourism, many airlines and airports have recorded higher profits than in pre-pandemic periods. This is the case of Air France – KLM French-Dutch holding company based in Tremblay-en-France, which released last July 29 its results for the second quarter of 2022 with excellent results.

Air France and KLM are among the most active airlines to accommodate the travel recovery, with a second-quarter capacity for network passenger activity at an index of 82%. The yield environment should remain high for the rest of 2022 (significantly positive in the third quarter), for the first time since 2019, with a strong summer demand resulting in yield levels above 2019.

According to the Air France – KLM report, in response to rising fuel prices and other external costs, the group made several fare increases during the first half of the year on all long-haul flights, depending on destination and class of travel. In addition, increased travel demand, the strong performance of premium services, and a solid recovery in corporate traffic led to performance above the 2019 level in the second quarter.

During the second quarter, Air France added three Airbus A350-900s and two Airbus A220-300s while KLM phased in three Embraer 195 E2s. One 777-200, one Airbus A320, three Airbus A319s, two Embraer 170s, and five Canadair Jet 1000s were phased out. The Group will continue to introduce new generation aircraft into its fleet to improve its economic and environmental performance.

As of June 30, 2022, the Group has a strong 11.9 billion euros of liquidity and credit lines at its disposal. Net income amounted to 324 million euros in the Second quarter of 2022, an increase of 1.8 billion euros compared to 2021. The capacity in Available Seat Kilometers (ASK) was 69.4% higher than last year.

Very peculiar to note how Cargo capacity, compared to the pre-COVID 2019 year, in the second quarter was still 8% lower than in 2019. However, thanks to high demand, total revenues in the second quarter of 2022 were 76 percent higher than in 2019.

As for Transavia, an airline of the Air France – KLM group, it is evident that seasonal tourist traffic is increasing sharply but the Operating result was slightly negative at -18 million euros, although improved by 80 million euros compared to the Second quarter of 2021. The fleet of Transavia is approaching 100 aircraft, to further capture the strong demand of leisure traffic in Europe.

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Vincenzo Claudio Piscopo

Vincenzo graduated in 2019 in Mechanical Engineering with an aeronautical curriculum, focusing his thesis on Human Factors in aircraft maintenance. In 2022 he pursued his master's degree in Aerospace Engineering at the University of Palermo, Italy. He combines his journalistic activities with his work as a Reliability Engineer at Zetalab.

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