KLM Royal Dutch Airlines Eyes Future for Catering Subsidiary

KLM Royal Dutch Airlines (KL) is actively exploring strategic options for its subsidiary, KLM Catering Services (KCS), as part of efforts to enhance the airline’s operational and financial performance. In its third quarter 2024 results, KLM announced plans to invest in KCS to ensure its long-term viability while maintaining cost efficiency and quality for passengers.

KLM CEO Marjan Rintel emphasized that the airline is not considering selling or downsizing its catering division. Instead, the focus is on investing in a new catering facility to support the airline’s sustainability and personalized catering goals. Rintel noted that the strategic options may include potential collaborations to strengthen the business unit’s future.

“We need to invest in a new catering building with modern facilities,” Rintel stated. “That is why we are looking at a wide range of options to make this business unit future-proof.”

The airline’s financial results also highlighted a loss of EUR 25 million (USD 27 million) due to a worldwide computer outage in July, triggered by a faulty update from US cybersecurity firm CrowdStrike. This incident led to the cancellation of 75 flights and significant logistical disruptions, including delayed maintenance and rebooking challenges for passengers.

In the third quarter, KLM reported a reduced operating profit of EUR 396 million (USD 428 million) on revenues of EUR 3.5 billion (USD 3.7 billion). For the first nine months of 2024, the operating profit stood at EUR 303 million (USD 328 million), lower than the previous year, primarily due to increased costs for equipment, staff, and airport charges.

To counter these challenges, KLM introduced its “Back on Track” plan in early October, aiming for a EUR 450 million (USD 486 million) short-term EBIT improvement and an EBIT margin above 8% by 2026-2028. The plan focuses on enhancing productivity, simplifying operations, and controlling costs while deferring or canceling certain investments.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com