Air France-KLM announced on Friday that its revenue for the first quarter of 2023 had increased, bouncing back and regaining balance since the Covid-19 pandemic.
AFP reported that the company has also repaid all state aid that it received during the Covid-19 crisis, and as a result, it claimed to be “standing on its own feet” once again.
Air France-KLM, a major airline company formed through a merger between Air France and KLM Royal Dutch Airlines in 2004 saw a 42% rise in its revenues due to strong demand between January and March 2023. This revenue growth was accompanied by a 35% year-on-year increase in passenger numbers.
The company’s CEO, Benjamin Smith, also mentioned that the company’s summer ticket sales are promising, and it is expected that there will be a busy holiday season across the company’s global network.
In his words, “very encouraging summer ticket sales” were “paving the way for a busy holiday season across our global network”.
Air France-KLM experienced significant losses in 2020 and 2021, amounting to 7.1 billion euros ($7.8 billion) and 3.3 billion euros, respectively. To cope with the financial losses, the company had to reduce costs, which included laying off employees and getting rid of unprofitable planes.
However, in 2022, the company managed to recover from the crisis, and its net profit was 728 million euros. This figure was more than double that of 2019, the last year before the pandemic.
According to reports, the airline company’s first-quarter loss for 2023 was lower compared to the previous year. However, it is important to note that the first three months of the year are typically the least profitable for airlines, and the crucial summer season is yet to come.
Due to the Covid-19 pandemic, the airline company required financial assistance, which included a 2.5 billion euro emergency loan from the French state. This funding was crucial as it helped to keep the company afloat during a time when flights were grounded worldwide.
As part of the state aid, the European Union imposed certain restrictions, but these restrictions have now been lifted. This allows the company to pay dividends, increase executive pay, or even consider acquiring rival carriers.
In light of this development, CEO Benjamin Smith stated that the full repayment of state aid has given the company its “full strategic autonomy”. He also mentioned that the company is now “standing on our own feet”, which signifies the company’s independence and ability to operate without external financial support.
