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KLM reports strong annual results for 2023; limited fleet and runway capacity in Q4

KLM

KLM generated 12.1 billion euros in revenues in 2023, with operational profits of 650 million euros. This is a record turnover despite profits being under pressure compared to 2022.

The KLM Group’s annual revenues amounted to 12.1 billion euros, compared to 10.7 billion euros in 2022. Operating profits totalled 650 million euros, compared to 706 million euros in 2022.

KLM had to cancel flights in the fourth quarter due to limited runway capacity at Schiphol, caused by bad weather, and due to reduced fleet deployability. Rebooking and compensating customers, and hiring additional aircraft, increased costs. Geopolitical tensions also persisted, which meant that KLM continued to bypass Russian airspace. This led to a need for more pilots in the cockpit on some Asian flights.

These factors led to an operating loss of 18 million euros in the fourth quarter, compared to an operating loss of 2 million euros in 2022. Revenues in the fourth quarter amounted to 3 billion euros, compared to 2.8 billion euros in 2022.

More contented passengers

Thanks to the tremendous efforts of all KLM employees, customer satisfaction expressed in the net promoter score (NPS) rose from 37 to 39 in 2023. KLM carried 30.3 million passengers to their destinations in 2023. Transavia welcomed 8.9 million passengers aboard its flights and took delivery of its first Airbus A321neo in December. This innovative aircraft type will contribute to achieving the sustainability goals of the entire KLM Group.

At Engineering & Maintenance (E&M), hundreds of new employees were recruited to address staff shortages and we will continue hiring in 2024. Revenues continued to recover at E&M in 2023.

“The past year was dominated by KLM’s ongoing recovery. We continued the introduction of Premium Comfort Class and the new World Business Class seats. As a group, Air France-KLM decided to invest heavily in a new generation of long-haul aircraft, the Airbus A350, which is cleaner, quieter and more fuel-efficient than its predecessor. Although KLM fared better operationally in 2023 than in the previous year, we still faced hurdles. We had to reduce capacity, firstly, due to persistent global supply chain issues, and secondly, because we are making up for lost ground in the recruitment of engineers and pilots. Unfortunately, this meant we were not always able to meet customer expectations. Stable, manageable operations remain our priority in 2024. To this end, we’ve introduced measures that will bear fruit in the months ahead.” said Marjan Rintel, Chief Executive Officer.

Erik Swelheim, Chief Financial Officer, says, “Financially, 2023 was a solid year for KLM. We generated revenues of 12 billion euros, strengthened our financial position and reduced our net debt to 1.35 billion euros. We invested heavily in the fleet, in more sustainable fuel and in IT, for the long term. Operating profits came under pressure as costs rose, while we were still operating below pre-Covid capacity. To finance planned investments, KLM aims to improve profit margins over the next three to five years. We look to the future with confidence, as demand for air travel continues to be strong.”

Transatlantic pilot project launched with DTC

The morning of February 29th, flight KL672 from Montreal landed at Schiphol carrying passengers who used the Digital Travel Credential (DTC) to guide them through border checks quickly and efficiently with Tap & Go. The flight forms part of a pilot project running until 31 March 2024 into how the DTC1 (a copy of the digital information contained on the chip of the passport) works in combination with facial recognition at border checks. At the request of the European Commission (EC), the pilot project is being conducted by the Ministry of Justice and Security, the Ministry of the Interior and Kingdom Relations and the National Office for Identity Data in cooperation with the Royal Netherlands Marechaussee, Amsterdam Airport Schiphol, KLM and technology provider IDEMIA.

The EC issued the request to test the use of the DTC in practice in the border process. The EU is currently developing policies for the use of a digital travel document, which could possibly enable the use of the DTC for boarding and border control in the future.

The pilot project

Passengers flying KLM from Canada (Calgary, Edmonton, Toronto, Vancouver and Montreal) to Amsterdam are eligible to participate in the pilot project, as long as they hold a Belgian, Dutch or Canadian passport and are over 18 years of age. They receive an email invitation from KLM to participate in the pilot. Passengers can upload their passport information at home using a app, combined with a facial photo, facilitating early checks by the border control authorities before they arrive at Schiphol. Upon arrival at Schiphol, participants pass through a special DTC Tap & Go border gate. Based on a facial scan, the DTC is called up. Participants then hold their passports against the border gate reader. If there is a match between the DTC and the passport presented and no irregularities emerge from previous checks, the border can be crossed. A physical passport is still required for the pilot project. Expectations are that this will speed up the border process for travellers.

KLM

Nederland, Schiphol Netherlands Ambassador in Canada Isabel Schenkelaars arrives via the DTC DTC. Guests: State Secretary Eric van der Burg, DG Migration Annet Bertram, Schiphol CEO Robert Carsouw and CXO KLM, Barry ter Voert. (Photo: Roger Cremers).

Busy airports

Passenger numbers are increasing, and airports are getting busier. As a logical continuation of online check-in at home, the pilot project examines how we can further innovate airport checks for boarding and border control. For these checks too, travellers can prepare at home and the process at the airport can be faster and contactless. Barry ter Voert, Chief Experience Officer (CXO) and EVP Business Development at KLMOn a daily basis, we examine how we can make the passenger journey even more comfortable and enjoyable from start to finish. As an airline, KLM is responsible for passport checks as well as check-in and boarding. Digitisation provides an opportunity to make these checks faster and more efficient for our customers, starting from home. To do so properly, legislation and regulations are needed. That’s why are happy to be participating in the trial conducted by the Dutch government so that we can share our expertise and improve our services.”

About the DTC1

The DTC1 technology standard was issued by ICAO. Combining DTC1 with the application of biometrics, travellers can cross borders quickly and more easily. The DTC1 contains information from the biographical page of the passport (name, first names, etc.), supplemented by some technical elements to establish that the information was indeed obtained from an authentic passport. A key feature of the DTC1 is that this information should always be used in conjunction with a physical passport. Travellers only need to tap their passport on a reader and walk through.

 

Co-Founder & Chief Editor - TravelDailyNews Media Network | Website | + Posts

Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.

She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.

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