Air France-KLM Announces Cost-Saving Measures

Investing.com — Air France-KLM (EPA:AIRF) announced a series of cost-saving measures on Thursday aimed at restoring its EBIT margin to about 8% by 2028, 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 in addition to existing labor agreements.

A significant aspect of KLM’s plan involves increased outsourcing of maintenance operations from its primary hub at Schiphol to various alternative locations, 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.