Air France-KLM executives noted the continued strength of the premium market on a Wednesday morning earnings call.
"Both Air France and KLM are simultaneously upgrading their long-haul premium offerings, focusing on capturing growth in both the premium corporate and premium leisure markets," CEO Ben Smith said. "This includes the development of economy comfort at KLM and premium comfort at KLM. Both airlines now offer a business cabin seat with a door, establishing a new standard in business-class travel."
Smith also noted the launch of the newly revamped La Premiére cabin on Air France during the quarter, adding that "in Q1, this service is now in a very strong financial performance result, and we are profitable in La Premiére" compared to its "loss-making" performance prior to Covid.
"Premium demand is really, really strong, resulting in high yields," Air France-KLM CFO Steven Zaat said. "And on KLM, you see even a higher unit revenue growth, specifically coming from a very strong implementation of premium economy."
For May and June travel, Europe inbound bookings from the United States are up 2.1 percent year over year, while outbound bookings from Europe to the U.S. are down 2.4 percent, according to an Air France-KLM earnings presentation.
"Despite a context of political and economic uncertainty, Europe continues to demonstrate its strength as a leading travel destination," Smith said. "The missing U.S. outbound traffic may be redirected to other regions of the world, where we as a group will be well-positioned to capitalize on our extensive network of destinations."
About 26 percent of the group's capacity is to and from the U.S., Zaat said. "If you look at our two major competitors based here in Europe, they're between 37 percent and 47 percent … so our exposure is far less."
Air France-KLM Q1 Metrics
Air France-KLM reported first-quarter group revenue of nearly €7.17 billion, an increase of 7.7 percent year over year. Total passenger revenue was €5.42 billion, up 5.9 percent on a constant-currency basis from the prior year. Group capacity increased 3.8 percent compared with Q1 2024.
The group's net loss was €249 million compared with a loss of €480 million a year prior.
The company reiterated its full-year 2025 outlook, which includes a capacity growth projection of 4 percent to 5 percent year over year.
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