Air France-KLM Braces for $9.3B Fuel Surge

Air France-KLM expects its fuel bill to reach $9.3 billion this year, up $2.4 billion compared to last year. That’s higher than the $2.0 billion Group CEO Ben Smith guided some weeks ago after the war in the Middle East started. In response, the airline group intends to slightly trim capacity on long-haul flights operated by Air France and KLM, as well as on some Transavia France flights.

The group reported a consolidated net loss of €252 million for Q1, almost flat with last year’s €-249 million. Revenues were up by 4.4 percent to €7.5 billion, and expenses were flat at €7.5 billion. The operating result improved to €-27 million from €-328 million last year, but the operating margin

was 0.4 percent, despite a 4.2-percentage-point improvement year-over-year.

CFO Steven Zaat stated that these results were somewhat “surrealistic”, as they don’t fully include the higher fuel costs from March. They accounted for €86 million in the operating results bridge, but the fuel bills for March were actually due a couple of weeks later. At the same time, the effects of reduced capacity by the Gulf carriers were immediately evident in higher revenues (the aforementioned €7.5 billion) and in higher unit revenues of € 214 million.