OCTOBER 24, 2002 å- KLM Group today reports an Operating Income of EUR 141 million for the Second Quarter, ended September 30, 2002, compared to an operating income of EUR 83 million last year, which represents an increase of 70 percent. Net income amounts to EUR 86 million or EUR 1.82 per common share, compared to a net income of EUR 27 million, or EUR 0.56 per common share last year.

This fiscal year’s second quarter operating income was negatively affected by EUR 9 million, relating to the wild cat strike by ground engineers, as well as an additional EUR 10 million depreciation charge on KLM’s Boeing 747-300 fleet. The corresponding period last year was adversely affected by EUR 50 million as a result of the events of September 11, 2001.

KLM continued its conservative capacity policy, with overall capacity in the Second Quarter 2 percent below that of the corresponding period. During the quarter, overall traffic levels increased by 2 percent compared to last year, which resulted in the overall load factor improving by 3.4 percentage points to 80.2 percent. As manageable yields (excluding currency effects) were above last year’s levels, KLM maintained the quality of its operating revenues.

AEA (Association of European Airlines) statistics show that KLM continues to be ranked highest amongst the major hub-and-spoke carriers in Europe with respect to arrival punctuality, which improved by 6 percentage points to 92.0 percent.

Leo van Wijk, President and CEO of KLM, said: `Our Second Quarter results again demonstrate our ability to deliver a good set of results under difficult market circumstances. Through effective revenue management we were able to manage the increased pressure on our yields and to improve load factors, which resulted in our unit revenue remaining flat year-on-year. At the same time, we reduced our unit costs by 3 percent. Nevertheless, we remain focused on our cost levels.`

Operating Income for the six-month period ended September 30, 2002 was EUR 182 million, which compares to an Operating Income of EUR 106 million last year. Net Income for this period amounts to EUR 97 million, or EUR 2.05 per common share, and compares to a net income of EUR 46 million, or EUR 0.95 per common share last year.

KLM Group: An encouraging and improving trend in KLM’s revenues saw Group operating revenues for the Second Quarter decline less than 1 percent to EUR 1,846 million. This decline was less than the 2 percent in the First Quarter. KLM airline manageable unit revenues per ATK (excluding currency effects) increased by 5 percent, reflecting the combination of a flat year-on-year overall yield development and improved year-on-year load factors.

Passenger Business: Passenger capacity (measured in ASKs) in the Second Quarter was down 3 percent on last year. As passenger traffic was only down 1 percent on last year, load factor improved by 1.8 percentage points to 84.0 percent, with an underlying and more pronounced improvement in intercontinental Business Class load factor. Overall traffic on European routes performed particularly well, in part reflecting the successful implementation of the simplified fare structure during this quarter. KLM`s market shares in the Second Quarter developed positively, whereby market share growth is most evident on African, intra European and North Atlantic routes. Passenger yields were down 2 percent on last year. However, manageable passenger yields (excluding currency effects) increased 3 percent compared to last year, mainly due to a better class and country mix, illustrating the continued success of KLM’s effective revenue management system. Passenger traffic revenues, EUR 1,199 million in the Second Quarter, were 3 percent lower than last year. On the North Atlantic routes, the KLM and Northwest Airlines joint venture capacity was down 9 percent on last year. As traffic was only 5 percent lower compared to last year, load factor increased by 4 percentage points to 86.0 percent. The positive yield development continued in the Second Quarter.

Cargo Business: KLM Cargo’s operating revenues in the Second Quarter, EUR 245 million, were up 3 percent on last year, driven by a recovery in the air cargo market, which is reflected in traffic growth at KLM Cargo. Cargo traffic (measured in RTFKs) increased by 7 percent compared to last year. As cargo capacity (measured in ATFKs) was 1 percent below last year’s, cargo load factor increased by 5.5 percentage points to 71.4 percent. Cargo yields were 4 percent lower than last year. Manageable cargo yields (excluding currency effects), however, increased by 1 percent. In particular traffic on Asia Pacific and on African routes reported levels well above last year, while traffic on North Atlantic routes reported lower levels, mainly due to lower traffic originating from the USA.

Engineering & Maintenance Business: KLM Engineering & Maintenance revenues of EUR 226 million, were 1 percent lower than last year. A decline in the revenues attributable to KLM business was successfully offset by an increase in third party business. This success emphasizes Engineering & Maintenance’s capacity to react to changing operating conditions.

Leisure and Low Cost Businesses: The Dutch leisure market seems to have recovered from the effects of September 11, 2001, resulting in volume increases in both charter and scheduled services. Yields and load factors developed in line with our expectations, allowing Transavia’s Second Quarter operating revenues (including BASIQ AIR) to improve in comparison to the corresponding period. In the Second Quarter, buzz increased its network capacity (measured in sectors flown) by 20 percent compared to last year, which reflects the start up of high frequency, short distance routes focused on the French market. As in the previous quarter, buzz reported a significant year-on-year increase in passenger numbers in the Second Quarter. In August buzz announced a lease agreement for six 737-300 aircraft, which will replace part of its BAe 146 fleet.

For more detailed financial data please visit the Investor Relations site; http://investorrelations.klm.com

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