KLM airline to cut costs and give up part of its investments



10/04/2024 4:07 AM


KLM, the Dutch airline, has stated its plans to reduce expenses, sell off certain investments, and explore the possibility of selling assets in order to make lasting improvements to its operational and financial performance.



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The company is confident that optimizing the business will lead to a short-term increase in operating profits by €450 million. It anticipates reaching a profit margin exceeding 8 percent in the years 2026 to 2028.

It was stated that KLM needs to take steps to boost productivity and streamline the organizational setup as it is experiencing increased expenses for equipment, labor, and airport fees despite an increase in revenue.

It also highlights the fact that the company is currently updating its aircraft fleet, with a total investment of $1bn.

KLM's goal is to increase labor productivity by at least 5% by 2025, through the automation of operations. All investments that are not related to safety and compliance, such as renovating its headquarters and other owned buildings, will be removed. Simultaneously, the company will strive to uphold investment in its fleet of aircraft.

The airline is a member of the Air France-KLM group.

Air France-KLM's market value has dropped by 39.9% since the start of 2024.

source: ft.com

 


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