Air France-KLM has recorded a “solid” start until 2025 and is positive about the summer outlook, even amid the global economic uncertainty created by the actions of the US Trump administration.
Overview of performance from January 3rd to March on April 30th, Franco Dutch Group said that demand level incentives support higher revenues, while lower fuel prices support profitability. He also argued that the business' “diversified” network and strategic “agility” are positioned to withstand additional headwinds throughout the year.
So far, group CEO Ben Smith explained in a revenue call that the “increasingly uncertain” economic environment had not had a major impact on expectations that year. Smith said there was some demand and softness in economic class cabins on North American routes in April, as customers were “controlled” from purchasing tickets, but elsewhere “strong pricing dynamics” offset that impact.
“Premium sales are better than expected in all markets, including North America,” Smith said, adding that the group is not intending to adjust its capacity plans for transatlantic services.
Furthermore, Smith points out that Air France-KLM is less than its European colleagues IAG and Lufthansa Group to the North American market.
Therefore, he believes that “the dynamics of agile capacity deployment and lucrative fuel costs” will still make the business go well for beneficial growth.
Air France-KLM reduced its first quarter operating loss to 328 million euros ($183 million), but revenue rose 7.7% to 7.2 billion euros, halving its net loss to 249 million euros.
The group has not changed its full-year guidance, including unit costs for increasing capacity by 4-5% and “single digits less”, but continues to shun profitability forecasts.
