KLM’s 3Q 2024 results signal need for financial and operational overhaul

KLM Royal Dutch Airlines has reported a decrease in its operating profit for the third quarter of 2024, highlighting the need for substantial financial and operational changes. The airline achieved an operating profit of €396 million on a revenue of €3.5 billion, a notable drop from the same period last year.

Over the first nine months of 2024, the company’s operating profit lagged by €303 million compared to 2023, a shortfall attributed to rising costs in equipment, staffing, and airport charges.

In response, KLM has announced a comprehensive strategy to improve its financial health and operational efficiency. This initiative includes measures to boost productivity, streamline organisational processes, and implement cost-saving strategies. Additionally, the airline has decided to postpone or cancel select investments, focusing on immediate financial relief. A significant part of this strategy will involve exploring future options for KLM Catering Services to better align with the airline’s priorities in employment, personalised service, sustainability, operational control, and efficiency.

KLM CEO Marjan Rintel addressed the ongoing challenges: “Our planes are full, and passenger numbers have grown significantly in the first nine months. However, capacity constraints and high operational costs necessitate these adjustments. We’re preparing for significant investments in more sustainable and efficient aircraft over the coming years.”

Chief Financial Officer Bas Brouns echoed these sentiments, describing the financial performance of the first nine months as “historically low.” Brouns emphasised that the announced changes aim to enhance KLM’s cash position and enable future investments that will support long-term growth and stability.