Air France-KLM Group Sees Growth and Fleet Renewal

The Air France-KLM Group, which includes the flagship carriers as well as low-cost brands Transavia and Transavia France, is demonstrating robust growth and a clear commitment to fleet modernization. Employing 76,000 people and operating a combined fleet of 551 aircraft that serve over 300 global destinations, the Group is positioning itself for a strong future.

In the fourth quarter of 2024, the Group reported revenues of €7.9 billion ($8.7bn), marking a 6.4% increase compared to the previous period. This revenue surge came alongside a modest overall network capacity increase of 2.2%. Operating revenue reached €396 million ($436m), showing an improvement of €453 million ($498m) year-on-year. For the full year 2024, Group revenues climbed to €31.5 billion ($34.6bn), an increase of 4.8% over 2023, driven by a capacity boost of 3.6%, stable unit revenue, and higher third-party maintenance revenues. The operating revenue for the year hit €1,601 million ($1,761m) with an operating margin of 5.1%.

However, the Group’s net debt rose to €7.4 billion ($8.1bn) in 2024—an increase of €2.3 billion ($2.5bn) compared to 2023. This rise was largely attributed to a higher new and modified lease debt amount, which grew by €1.9 billion ($2.1bn) and was further influenced by the ongoing fleet renewal program and extended aircraft lease commitments due to delivery delays. Looking ahead to 2025, the Group expects a capacity increase of between 4% and 5% over 2024, even as unit costs edge up into the low single digits.

Central to the Group’s strategy is its fleet renewal initiative. By the end of 2024, 27% of the Group’s fleet comprised new-generation aircraft, and plans are in place to achieve an 80% new-generation fleet by 2030. This transformation involves taking delivery of advanced aircraft types designed to improve fuel efficiency and reduce noise. Key highlights include the Airbus A350, which offers 25% lower fuel consumption per passenger kilometer and operates 40% quieter than its predecessors; the Airbus A320neo family, providing 15% fuel savings and operating 50% quieter; and the Airbus A220, delivering 20% fuel efficiency improvements and a 34% reduction in noise. On the regional front, the Embraer 195-E2, replacing the E-190, is noted for its 31% fuel savings and 63% quieter performance.

In 2024, the Group retired 18 older generation aircraft—including models such as Boeing 737-700/800s, Airbus A319s, A320s, an A330, and an Embraer E190—while simultaneously introducing 41 new planes. These new deliveries comprised eight Airbus A350s, 19 aircraft from the A320neo family, nine Airbus A220s, four Embraer E195s, and one Boeing 787-10. Group CEO Benjamin Smith commented on the strong finish in Q4 2024, noting that despite operational and external challenges, the focus remained on delivering premium, customer-centric service. He highlighted strategic moves such as new route launches, enhanced partnerships, and the recent acquisition of a minority stake in SAS, which has already begun to yield promising results.

In contrast, KLM’s performance in 2024 was less robust. While KLM experienced a 5.4% revenue growth, its operating revenues fell by €234 million ($257m) to €416 million ($457m) due to rising equipment, personnel, and airport fees. To address these challenges, KLM has launched a cost-cutting program targeting €450 million ($495m) in savings for 2025 and aims to achieve an 8% profit margin by 2026-2028. CEO Marjan Rintel acknowledged the dual nature of their results, noting underutilized flight capacity and rising costs, while also pointing to progress in areas like the introduction of the first Airbus A321neo and the conversion of its Premium Comfort Class.

Despite the mixed fortunes at KLM, the overall Group performance remains positive, with 2024 marking another year of strategic transformation and growth. With 33 million passengers on board KLM and 9.5 million on Transavia, along with impressive cargo volumes and new destination launches, the Air France-KLM Group continues to solidify its position in the global aviation market while charting a clear course toward a more efficient and sustainable future.

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