Air France-KLM swung to an unexpected loss in the last quarter of 2023, hit by higher costs and disruptions caused by conflict in the Middle East, sending its shares down 10% this morning.
European airlines have reported strong demand for the coming year, but supply chain constraints have led to higher costs and maintenance delays, and geopolitical tensions have also disrupted plans and schedules.
The Franco-Dutch airline group reported record revenues for 2023 and an operating profit of €1.7 billion, in line with expectations,
However, it also posted a fourth-quarter operating loss of €56m, missing analysts' consensus forecast for a profit of €88m, according to a company poll.
A rise in unit costs was only partly compensated by a lower jet fuel price.
Ticket sales were high in 2023, helping push up revenues 14% year-over-year to €30 billion.
The annual operating margin rose to 5.7%, up 1.2 percentage points year-on-year. But a scarcity of spare parts and a shortage of engineering labour has proved challenging for the group.
Still, Air France-KLM was able to pay down €1.3 billion in debt, much of which was amassed during the pandemic travel shutdown, leaving outstanding net debt at €5 billion.
"We can be satisfied of our efforts to further strengthen our balance sheet and restore the Group's equity," chief executive Ben Smith said in a statement.
