Air France-KLM CEO Calls Amsterdam Schiphol Situation "Unsatisfactory"

Air France-KLM Group CEO Benjamin Smith has expressed his dissatisfaction with the ongoing capacity cap and staff shortages at Amsterdam Schiphol Airport. Despite the Dutch airport’s predicament hitting KLM hard, the airline group reported a strong third quarter with capacity at 89% of pre-pandemic levels.

Air France-KLM unhappy with AMS situation

With Amsterdam Schiphol Airport (AMS) still experiencing major disruption, Air France-KLM Group CEO Ben Smith made the comments after the airline group posted its quarterly results. While many European airports eventually implemented solutions to minimize the disruption seen over the summer, AMS finds itself in the same dire position.

Group CEO Benjamin Smith said,

“Thanks to solid preparation and to our agile approach to capacity, Air France-KLM was able to make the most of the strong travel demand this quarter. While the situation remains unsatisfactory in some key airports – notably impacting KLM at its Amsterdam Schiphol hub – we saw significant improvements following the operational challenges that had erupted earlier this year.”

KLM has estimated it could lose up to €70 million in ticket sales due to the airport’s daily passenger cap this winter. Additionally, Air France-KLM had to shell out around €60 million extra in compensation last quarter due to severe delays and cancelations.

Photo: KLM

The airline group was still able to return to profit in Q2 despite the Schiphol chaos, beating analysts’ loss-making forecasts with an operating profit of €386 million ($384 million). This quarter the group has done even better with operating profits of over €1 billion.

Air France-KLM added,

“Schiphol remains in a challenging situation, in the context of very tight labor market conditions, and imposed capacity restrictions to KLM. Air France and KLM did their utmost to mitigate these challenges and continue to prioritize safeguarding the trust of their customers. For the third quarter, these disruptions resulted in 60 million Euros in additional compensation costs compared to the same quarter in 2019.”

The latest on Amsterdam Schiphol

Having confirmed a September and October passenger cap, Amsterdam Schiphol’s passenger caps are expected to remain for six more months due to ongoing operational challenges. AMS’ daily passenger cap will be reduced by 22% until March 2023 as the airport struggles to attract enough staff, particularly in security.

Photo: Chris Loh | Simple Flying

The airport’s On-Time Performance (OTP) has been all over the place this year, dropping to less than 20% on occasion. AMS has also drawn attention after rolling out an expensive VIP queue-skipping program costing up to $1,500 – the airport had to stop taking new bookings due to a “large volume of requests” from travelers eager to escape the queues.

Strong quarterly results

Air France-KLM Group posted revenues of €8.1 billion ($8.06 billion) for the quarter, over €500 million ($499.2mn) more than it achieved in Q3 2019 and almost double compared to 2021. Operating profit stood at €1.02 billion ($1.01bn) with an operating margin of 12.6% above 2019.

CEO Smith stated,

“The Group posted a strong operating result in spite of rising fuel costs and inflation, and the Group remains confident in its ability to further increase capacity during the Winter season. I would like to thank all customers who chose to fly with us, and our employees who did their very best to welcome them at every step of their journey.”

The airline group put its profitability down to “an increase in capacity, load factor and yield” – passenger revenue per ASK (available seat kilometer) was up by 52% compared to last year, and the group reached a load factor of 90%. While it has yet to reach parity with its pre-pandemic capacity, Air France-KLM’s full-year outlook is optimistic, projecting an operating profit of over €900 million ($897 million).

What are your thoughts on the ongoing situation at Amsterdam Schiphol Airport? Let us know your insights in the comments.