AFI KLM E&M Continues Solid Performance

Air France Industries KLM Engineering & Maintenance (AFI KLM E&M) almost doubled its operating profit in 2022 as external sales climbed 36% during a year of recovery for the maintenance market.

In 2021, the MRO provider was the only profitable unit of Air France-KLM Group, but that changed last year as resurgent passenger demand saw its network airlines more than double their sales and post €1.2 billion ($1.8 billion) operating profit, which compares with €163 million from AFI KLM E&M.

Airline recovery boosted AFI KLM’s internal sales – those to Air France-KLM airlines – to €2.2 billion for the year, while third-party business accounted for almost €1.4 billion of revenue.

Air France-KLM noted that third-party sales grew 34% at constant currency, was faster than the growth of its internal MRO business. This growth accelerated in the final quarter, when third-party sales climbed 41% on a constant currency basis. 

Furthermore, the MRO provider’s parent was keen to stress the “significant number” of third-party contracts signed during the year.

Other maintenance highlights for 2022 included the finalization of a branded services agreement with CFM for the support of Leap-1A and -1B engines, and the signing of contracts with Rolls-Royce and Pratt & Whitney to expand AFI KLM E&M’s other engine maintenance capabilities.

Third-party business agreed during the year included new contracts with Air Canada and Aeromexico, and, most recently, an APU and component support contract with India’s Akasa Air.

Air France Industries, meanwhile, will perform MRO work on Pratt & Whitney PW1500G geared turbofan and Rolls Royce Trent XWB-84 engines. This work will be offloaded from the engine OEMs and other customers that have contracted maintenance services with the OEM. Here the commercial relationship will be predominantly with the OEM and not with the operator of these engines. 

Furthermore, AFI KLM E&M will compete for engine parts advanced repair work within the OEM’s networks.