A record operating profit for Air France-KLM Group in Q3 2023

Air France-KLM Group has reported a robust performance in the third quarter of 2023, marked by record operating profits. The key highlights of their performance are as follows:

• Operating Margin: The operating margin reached 15.5%, primarily driven by strong demand during the summer season.
• Capacity and Load Factor: Group capacity stood at 94%, compared to 2019, with a load factor at 90%.
• Revenue Growth: Group revenues reached €8.7 billion, reflecting a 7% increase compared to the previous year.
• Operating Result: Air France-KLM reported an operating result of €1.3 billion with an operating margin at 15.5%.
• Adjusted Operating Free Cash Flow: Seasonal variations in working capital led to adjusted operating free cash flow at -€0.4 billion, but the company had cash at hand amounting to €10.2 billion, including RCF.
• Debt Reduction: Net debt decreased by €1.3 billion compared to the end of 2022, resulting in a Net debt/EBITDA ratio of 1.1x.
• Net Income: Net income reached €0.9 billion, showing an increase of €0.5 billion compared to the previous year, contributing to equity restoration.

In addition to these results, Air France-KLM also announced significant post-quarter events. Notably, the company is planning to take up to a 19.9% non-controlling stake in the share capital of SAS AB, subject to approvals and conditions. They have also signed a definitive agreement for quasi-equity financing with Apollo Global Management, potentially amounting to €1.5 billion.

Commenting on the results, Mr Benjamin Smith, Group CEO, expressed his gratitude to the teams for their dedication and highlighted the company’s sustainable strategic roadmap, including a substantial order for 50 Airbus A350 aircraft, aimed at reducing CO2 emissions per passenger kilometre. The CEO also discussed efforts to restore equity and an initiative to enhance the company’s presence in the Nordics through the acquisition of a stake in SAS.

Looking forward, Air France-KLM has provided its outlook for the remainder of 2023, including expectations for capacity, unit costs, and capital expenditures, which remain unchanged. The company’s performance reflects a strong recovery in the aviation industry, driven by demand and strategic initiatives.

Air France / KLM Group third-quarter results: download