FX.co ★ Air France-KLM Stock Down On Wider Q1 Loss Despite Revenue Growth; Sees Higher Capacity In FY24

Air France-KLM Group's shares dropped approximately 4% during early Paris trading after the airline announced an increased net loss for the year's first quarter, despite seeing a rise in revenue.

For the fiscal year 2024, Air France-KLM Group, inclusive of Transavia, anticipates an increase of 5% in its Available Seat Kilometers compared to 2023.

The conglomerate, which includes Air France, KLM, and Transavia, recorded a net loss of 522 million euros in the first quarter. This is more significant compared to the previous year's loss of 344 million euros. The group also posted an operating loss of 489 million euros, a gulf far wider than the 306 million euros loss of the previous year. This loss was attributed to disruption expenses and lower cargo income.

The company's EBITDA (earnings before interest, taxes, depreciation, and amortization) registered a drop of 38% to 176 million euros from the 286 million euros recorded in the same quarter of the previous year.

On a brighter note, the Group's revenue grew by 5.1% to 6.65 billion euros from the preceding year's 6.33 billion euros. This represented an increase of 6.2% based on constant currency values.

In the first quarter of 2024, Air France-KLM welcomed 20.9 million passengers, a 6.2% increase from the previous year. As the capacity increased by 4.5%, traffic also growth by 5.0%, resulting in a slight load factor increase of 0.4 points to 86%.

Group Passenger unit revenue saw an increase of 2.1% compared to the preceding year. This hike was fundamentally driven by yield growth across all long-haul areas, excluding Asia and the Middle East, where there was a 32% increase in capacity. Short and Medium-haul yields also saw a rise.

Benjamin Smith, Group CEO, said, "Although the start of the year was marked by ongoing geopolitical tensions, Air France-KLM saw additional revenue growth this quarter, leveraging the ever-reliable travel demand. We remain confident in our ability to meet our 2024 unit cost outlook. We are preparing for a promising summer season, particularly with the eagerly anticipated Olympic and Paralympic Games in Paris."

Air France-KLM shares hit 9.69 euros in Paris, down 3.73%.