Q2 2024 Air France KLM SA Earnings Call Transcript
Key Points
- Air France-KLM (AFLYY) transported more passengers this quarter compared to the same period last year, with group revenue and capacity both up by 4%.
- The company's cash position remains solid, and financial leverage is tightly monitored.
- The ongoing renewal of the fleet is progressing steadily, with new generation aircraft now representing 23% of the total fleet, up from 18% last year.
- Premium revenue grew by 7.4% compared to last year, driven by the premium leisure segment.
- The company has successfully signed a joint venture deal with Airbus to provide Airbus A350 components maintenance services worldwide, which is expected to offer cost-related synergies.
- Operating results are down compared to the same quarter in 2023, partly due to sluggish performance at KLM and Transavia.
- Air France's activity was weak due to exceptional items, including significant exposure to the Olympic Games, which negatively affected June traffic in Paris.
- The net debt to EBITDA ratio stood at 1.6 times, primarily due to high levels of net investments for the quarter.
- The company has implemented a hiring freeze for non-operational overhead staff and a 20% reduction in discretionary spending for the second half of the year.
- The fuel price increased from EUR750 per metric ton last year to EUR800 per metric ton this year, negatively impacting costs.
Air France is being recorded. At this time, I would like to turn the conference over to Ben Smith, CEO; and Steven Zaat, CFO. Please go ahead, sir.
Thank you, operator. Good morning, everyone, and thank you for joining us this morning for the presentation of Air France KLM results for the second quarter of 2024. I'm joined today by Steven Zaat, our CFO. We'll be available to take your questions at the end of this presentation, and I'll start by sharing some of this quarter's key highlights, and then I'll turn it over to Steven for a detailed presentation of our financial performance and the outlook for the quarters ahead. And lastly, I'll wrap it up at the end and then open it up for the Q&A.
So let's start by looking at our financial performance for this quarter. We transported more passengers this quarter than the same period last year. Group revenue and capacity are both up 4% and our load factor remains stable.
Our operating result
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