Air France-KLM to cut costs, shares pop
2024.10.03 07:41
Investing.com — Air France-KLM (EPA:) on Thursday announced a series of cost-saving measures aimed at restoring its EBIT margin to about 8% by 2028, a level consistent with pre-pandemic performance.
At 7:41 AM (1141 GMT), Air France-KLM was trading 3.1% higher at €8.19.
The airline’s strategy is multifaceted, focusing on increasing staff productivity by 5% by 2025.
This target is additional to existing labor agreements.
An important aspect of KLM’s plan involves the increased outsourcing of maintenance operations from its primary hub at Schiphol to various alternative locations.
This move is expected to yield substantial savings while maintaining operational integrity.
“We see the margin target of 8% by 2028 as incremental compared to our expectations of network airline margins reaching around 7%,” said analysts at Citi Research in a note.
The airline also intends to explore new opportunities in on-board catering, which could generate additional revenue streams
