Air France-KLM posts fourth quarter loss, IAG records record profit
Shares in Europe’s two top flag carriers moved in opposite directions on Thursday after British Airways owner IAG posted record profits for 2023, while rival Air France-KLM fell for the final three months of the year due to Middle East turmoil. announced that it had suffered a loss. .
IAG, which owns airlines including British Airways, Aer Lingus and Iberia, posted a pre-tax profit as it benefited from “strong and sustained demand” for flights, driven largely by travelers. This reached an all-time high of 3.06 billion euros ($3.32 billion). For leisure.
Air France-KLM, on the other hand, saw its 2023 profits plummet after the Paris-based airline posted a loss in the fourth quarter due to turmoil in the Middle East and increased costs partly due to group pay agreements with KLM employees.
IAG of IAG,
The London-listed stock rose 1% on Thursday, following a rise of 1% over the past 12 months. AF by Air France-KLM;
The Paris-listed stock plunged 8% on Thursday after losing 41% of its value over the previous year.
IAG’s huge profit is the result of the airline owner successfully reducing cost per passenger by increasing capacity to 97.5% of pre-Covid-19 levels, doubling operating margins year-on-year.
The owner of British Airways reported a 32.6% rise in passenger traffic revenue as strong tourism demand offset a faster recovery in sales to business passengers. This helped offset a 28.4% decline in freight business revenue.
In contrast, Air France-KLM posted a loss of €56 million in the fourth quarter of 2023. This came as the outbreak of war between Israel and Gaza last October led to flight cancellations, increasing airline costs and offsetting a 6.7% increase in final revenue. Quarterly earnings.
For the full year 2023, Air France-KLM’s revenue rose 13.7% to €30 billion, with annual earnings before interest, taxes, depreciation and amortization during the period up 14% to €4.2 billion.
Analysts at Barclays said they expect both Air France-KLM and IAG to benefit from lower fuel costs, which will partly offset higher costs across the rest of the business caused by “volatile labor relations”.
Barclays analysts noted that the market has favored European low-cost carriers over domestic carriers over the past three months, with EasyJet EZJ.
Ryanair RYA,
And Wizz Air WIZZ,
Shares of Air France-KLM, IAG and Lufthansa LHA fell 6.6%, while on average they rose 19.6%.
“While the trading outlook for low-cost carriers is bright, we believe the bleak outlook for national carriers is overblown,” Barclays analysts said.
