Air France-KLM cargo revenue falls 32.8% YoY

Air France-KLM Group today reported 8.7 billion euros ($9.2 billion) in revenue for the third quarter of 2023, an increase of 6.8% year over year. The carrier’s cargo revenue fell 32.8% YoY to $590.9 million. [caption id="attachment_57065295" align="alignleft" width="300"] An Air France Cargo B777 takes off. (Photo/Air France)[/caption] THE BIG PICTURE: Ai r France-KLM’s earnings are in line with those reported by other major carriers throughout 2023. While overall revenue is up due to strong passenger demand, cargo revenue is down due to high capacity and low demand. “This strong [passenger] performance enabled the group to offset the decrease of cargo revenues and the inflation,” the earnings release stated. BY THE NUMBERS: Q3 figures showed the carrier thriving in a recovering passenger market but struggling in a challenging cargo market: EBITDA was $2.1 billion, up 18.8% YoY; Cargo tonnage was 218,000 tonnes, down 2.1% YoY; and Cargo load factor was 44.8%, down 1.4 points YoY. The carrier reported $23.9 billion in revenue for the first nine months of 2023, up 17.4% YoY. Additionally for the first nine months: Cargo revenue was $1.9 billion, down 30.9% YoY; EBITDA was $3.8 billion, up 27.5% YoY; Cargo tonnage was 10.5 million tonnes, up 6.6% YoY; and Cargo load factor was 45.5%, down 6.6 points YoY. WHAT THEY’RE SAYING: The carrier attributed the reduced cargo load factor in 2023 to increased bellyhold capacity. “The resumption of the passenger travel resulted in an increase in available tonne kilometers of 3.3% versus the third quarter of 2022,” the earnings release stated. “Furthermore, some operational issues of the group’s full freighters resulted in a reduction in South America operations in order to restore reliable operational performance for our customers.” STATE OF PLAY: Air France-KLM has been in and out of the courts for the past several months in a bid to stop the Dutch government from reducing slots at Amsterdam Airport Schiphol (AMS). Under the proposal, AMS will be allowed to operate a maximum of 452,500 flights annually beginning next summer in a move to reduce noise and CO2 pollution. The current limit is 500,000 flights annually. Group Chief Executive Benjamin Smith criticized the proposed slot reduction in a media call today, warning that traffic will go elsewhere , damaging Amsterdam’s economy. NOTEWORTHY: Smith touted the carrier’s progress in its sustainability goals, specifically through its efforts to modernize its fleet. “Our landmark order for 50 Airbus A350 aircraft will significantly accelerate the renewal of our long-haul fleet with more fuel-efficient, cost-effective and quieter aircraft,” Smith said in the earnings release. “This new order represents a multibillion [euro] investment to our sustainability roadmap, coming on top of previous orders for new generation widebody and narrowbody aircraft, and is complementary to our sustainable aviation fuel commitments. It confirms our ambition to reach 64% of next-generation aircraft by 2028 and is another major step towards our target of reducing our CO2 emissions per passenger kilometer by 30% by 2030.” FUTURE LOOK: The group estimates its full-year capital expenditure to be $3.2 billion. MARKET REACTION: Shares of Air France-KLM Group (OTCMKTS: AFLYY) w ere up 3.81% from market open to $1.22 as of market close today. The group has a market capitalization of $3.1 billion. Editor’s note: All amounts have been converted to U.S. dollars.

Air France-KLM cargo revenue falls 32.8% YoY

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