Global MROs are working their way back toward financial health as their in-house customers recover and external customers show at least some strength as well. One such example is Air France Industries-KLM Engineering & Maintenance (AFI KLM E&M), which recently released its 2021 financial results.
AFI KLM E&M reported positive operating income of €69 million ($78.3 million) in the fourth quarter of 2021 and €88 million ($99.8 million) for the full year of 2021. Total revenue for the fourth quarter was €796 million ($903.4 million), up 32% from same period, prior year. Total revenue for the full year of 2021 was €2.8 billion ($3.1 billion), down just 2% from 2020 revenue.
The gains were generally due to more work for AFI KLM E&M’s parent airlines. Fourth-quarter, third-party revenue was €263 million ($298 million), slipping 8% from the fourth quarter of 2020. And for the year 2021, third-party revenue was €1.02 billion ($1.25 billion), down much more steeply, 18%, from 2020 third-party revenue.
Operating profit margins were 9% and 3% for the final quarter and year, respectively.
AFI-KLM E&M managers said the fourth-quarter 2020 result had been heavily affected by one-off bookings related to the COVID-19 crisis. However, they said improvement in operating results was also due to less slack in work, management’s cost-control efforts and improvement in airline operations.
According to AFI KLM E&M, the 8% decrease in third-party revenue was due to external customers using green time on their assets to avoid shop visits. The increase in internal revenues is consistent, on the other hand, with increasing activity of Air France-KLM airlines, compared with the final quarter of 2020.
Managers noted that full-year 2021 total revenues were close to 2020 levels, a year that started out strong before the virus hit. But profitability increased, again due to cost controls and other savings.
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