KLM Royal Dutch Airlines (KL, Amsterdam Schiphol) has postponed plans for its new head office and is critically reviewing its investments, cost-saving strategies, and new revenue opportunities as it looks to control rising costs which have resulted in an operating loss of EUR31 million euros (USD34.1 million) for the first half of 2024, despite higher revenues compared to the previous year.

In a statement, Chief Financial Officer Bas Brouns described the results as "downright disappointing", adding that margins must improve. "We are flying more than last year, but costs are rising faster than revenues. We are already working on initiatives to work more efficiently, generate more revenue and cut costs. We are going to accelerate and expand this. Among other things, this means postponing the plan for KLM's new headquarters. In addition, we are taking a critical look at other investments. We will also continue to reduce the growth in indirect staff," he said.

CEO Marjan Rintel blamed the results on a shortage of pilots and engineers and supply chain delays, which compromised fleet capacity. "Our results fell short of expectations due to significantly higher costs. The operation was more stable, but capacity could not yet be fully utilised. The fleet could not be fully deployed. We have insufficient numbers of pilots and engineering staff and face long delivery times for spare parts."

She said the airline would announce additional measures after the European summer break. "In the period ahead, the focus will be on cost control and improving our financial performance. We will soon announce additional measures for the entire company. This is a difficult message but essential for KLM's future," she said.

The operating loss of EUR31 million in the first half of 2024 compares with an operating profit of EUR129 million (USD142 million) for the same period in 2023. This was despite revenues having risen to EUR6 billion (USD6.6 billion) in the first half of 2024 from EUR5.6 billion (USD6.1 billion) in the corresponding six months last year. The Dutch subsidiary of Air France-KLM transported close to 16 million passengers during the first half of 2024.

KLM said the second quarter of 2024 saw more stable operations and fewer disruptions, supported by additional measures like spare fleet availability and increased staffing. Despite a EUR260 million (USD286 million) operational result on EUR3.2 billion (USD3.5 billion) revenue for 2Q24, high costs led to results falling short of expectations.

In the first half of 2024, the carrier's engineering and maintenance business saw increased revenues and ongoing recruitment. Cargo experienced higher demand, boosting revenues despite global supply chain challenges leading to reduced fleet deployment.

KLM subsidiary Transavia Airlines (HV, Amsterdam Schiphol) also reported higher revenues, having transported nearly 4.5 million passengers and achieving positive results in 2Q24 under challenging conditions.