The fourth quarter wiped out an exceptional year for Air France-KLM, after two years that had forced it to recapitalize twice and call on the French and Dutch governments for help. With freight rates back to normal after the post-pandemic euphoria, air freight is back to its pre-Covid status.

In 2023, the Franco-Dutch airline group posted net income up 28.3% year-on-year, to €934 million, on sales of €30 billion (+14%), enabling it to clean up its financial structure shaken by Covid-19, returning to positive equity for the first time since 2019 after 2022 marked the return to the green.

Negative fourth quarter 2023

The health crisis caused the Franco-Dutch air carrier to lose €10.4 billion over the two-year period 2020-2021, forcing it to undergo two recapitalizations (which prompted French shipowner CMA CGM to take a 9% stake in the company, which is now in the process of exiting) and to call on the French and Dutch governments for assistance.

But the end of the year was not so good, with a net loss of 256 M€ in the fourth quarter, whereas operating profitability was still 7.8% at the end of the first three quarters, at the top end of the target range for 2024-2026 (7 to 8%). The final figure is 5.7% (up 1.2 points on 2022).

The Paris Bourse reacted accordingly, with Air France shares dropping 7.1% to €10.60 in a stable market. Investors may also have been disappointed by an annual profit that analysts were expecting to exceed €1 billion, according to compilations by Factset and Bloomberg.

All the more so as British competitor IAG (British Airways, Iberia...) pocketed an annual net profit three times higher, at €2.7 billion.

Tonnages down by 6%

In the fourth quarter, Air France and especially KLM suffered from a shortage of spare parts, a recurring problem for the entire sector, and geopolitical tensions (war in the Middle East) which forced the suspension of routes and dampened demand from neighboring countries.

Finally, freight rates fell sharply after the post-pandemic boom. For the company, this translated into a 29% drop in sales, to €2.5 billion, and a 6.1% drop in tonnage.

Passenger numbers have not yet returned to pre-crisis levels: with 93.6 million passengers on Air France, KLM and Transavia aircraft last year, that's 10.3 million more than in 2022, but still 10.4 million less than in 2019.

At the same time, Air France-KLM has continued to reduce its net debt, from €6.33 billion at the end of 2022 to €5.04 billion at the end of 2023.

In 2024, the year of its 20th anniversary, the company plans to increase its passenger capacity by 5% year-on-year and limit the rise in unit costs to between 1% and 2%, compared with 3.5% in 2023. Between 3 and 3.2 billion euros are expected to be spent on capital expenditure, in particular on aircraft renewal.

La rédaction (avec Tangi Quemener de l’AFP)