Air France-KLM recorded a “solid” start to 2025 and is positive about the summer outlook, even amid the global economic uncertainties created by the actions of the Trump Administration in the USA.
Outlining its performance in the January-March quarter on 30 April, the Franco-Dutch group said encouraging demand levels had supported rising revenues, while lower fuel prices are aiding profitability. It also insisted that the business’s “diversified” network and strategic “agility” positions it to withstand additional headwinds across the rest of the year.
So far, explains group chief executive Ben Smith during an earnings call, the “increasingly uncertain” economic environment has not fed through to any significant impact on expectations for the year. There has been some demand and yield softness in the economy-class cabin on North American routes in April as customers “hold back” from buying tickets, particularly European point-of-sale, Smith says, but “strong pricing dynamics” elsewhere are offsetting that impact.
“Premium sales are doing better than we would have expected across all markets – including North America,” Smith states, adding that the group does not intend to adjust its capacity plans for transatlantic services.
Moreover, Smith notes that Air France-KLM is far less exposed to North American markets than its European peers IAG and Lufthansa Group.
He therefore believes that with “agile capacity deployment and favourable fuel cost dynamics”, the business is still on track for profitable growth.
Air France-KLM cut its first-quarter operating loss year on year by €161 million ($183 million) to €328 million, while it halved its net loss to €249 million, on a 7.7% rise in revenue to €7.2 billion.
The group has left its guidance for the full year unchanged – including capacity up by 4-5% and unit costs to rise “by a low single digit” – although it continues to avoid forecasting profitability.
