Air France-KLM Loses €480 Million in Worst Quarter Since Pandemic

Air France-KLM recorded its worst quarterly loss since the peak of the pandemic, reaching €480 million. This setback highlights the airline's ongoing struggle with rising costs stemming from geopolitical tensions, supply chain issues, and labor shortages following the pandemic.

The conflict in Ukraine forces flight rerouting, leading to higher fuel and staffing expenses. Additionally, global supply chain bottlenecks cause significant delays in receiving essential aircraft parts. Despite an increase in passenger numbers (approximately 20 million passengers, a 6.2% year-on-year increase), the airline's freight transportation revenue remains underwhelming.

KLM CEO Marjan Rintel cites a combination of external pressures impacting the airline's performance. Bad weather patterns lead to flight disruptions, while staff shortages, fuelled by pandemic layoffs, persist among KLM and its suppliers. Lengthy delivery times for aircraft components have become a costly hurdle.

Rintel acknowledges the ongoing nature of these challenges but expects gradual improvement thanks to an initiative launched in March. The company prioritises hiring more technicians and pilots to reduce vulnerability to supply chain issues.

Air France-KLM isn't alone in its struggles. Lufthansa also reported a sizeable quarterly loss of €273 million, fuelled mainly by declining freight revenue and expenses incurred due to labor strikes. The German airline promises cost-cutting measures, the freezing of new projects, and potential restructuring in response.