LONDON, Feb 19 (Reuters) - Air France-KLM reported stronger-than-expected full-year results and a record operating profit on Thursday, as its strategy of offering a premium customer experience bore
Air France-KLM Achieves Record Profit Amid Premium Demand Surge
By Joanna Plucinska
LONDON, Feb 19 (Reuters) - Air France-KLM reported on Thursday a record operating profit for 2025, sending its shares up 6.8% as its strategy of offering a premium customer experience bore fruit despite ongoing cost challenges.
Surge in Premium Travel Demand
European airlines have seen a rise in demand for premium services, despite a drop in the number of Europeans travelling to the United States last year. Air France-KLM said growth remained particularly strong on transatlantic routes, particularly for its premium cabins after the group invested heavily in faster WiFi, upgraded airport lounges and a revamped first class.
"Our airlines carried over 100 million passengers (last year) and generated an operating result of more than 2 billion euros ($2.36 billion) – a first in our history," Chief Executive Ben Smith said in a statement.
That represents an increase of 400 million euros from 2024 and was comfortably above the 1.88 billion euros forecast by analysts for earnings before interest and taxes, in an LSEG poll.
Capacity Expansion and Margin Goals
The airline expects to increase its capacity by between 3% and 5% this year as new planes arrive. It also said it wants to widen its operating margin to over 8% by 2028. It reported a margin of 6.1% for 2025.
The better-than-expected results were in part driven by a drop in fuel prices as well as an increase in revenue. Costs continued to creep up with charges at Amsterdam's Schiphol airport squeezing per-passenger yields.
Air France-KLM shares are up almost 52% year-on-year as the group has managed to mitigate expensive labour challenges.
Potential Challenges Ahead
Still, analysts have flagged a potential slowdown in Americans travelling to Europe in the year to come as economic woes weigh on consumer spending and long-haul travel intentions.
($1 = 0.8480 euros)
(Reporting by Joanna Plucinska; Editing by Kirsten Donovan, Emelia Sithole-Matarise and Susan Fenton)
