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Air France KLM (AFLYY)
OTHER OTC:AFLYY
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Air France KLM
(OTC:AFLYY)
Rating:70Outperform
Price Target:
$2.00
▲(33.33% Upside)
Air France KLM (AFLYY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.94B
Dividend YieldN/A
Average Volume (3M)22.74K
Price to Earnings (P/E)3.6
Beta (1Y)0.82
Revenue Growth6.69%
EPS Growth268.38%
CountryUS
Employees78,399
SectorIndustrials
Sector Strength73
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)0.16
Shares Outstanding2,627,698,700
10 Day Avg. Volume33,258
30 Day Avg. Volume22,737
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap4.63
Enterprise Value/Revenue0.56
Enterprise Value/Gross Profit2.47
Enterprise Value/Ebitda3.44
Forecast
1Y Price Target
$2.00Price Target Upside33.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Air France KLM Business Overview & Revenue Model
Company DescriptionAir France-KLM SA, together with its subsidiaries, provides passenger and cargo transportation services on scheduled flights in Metropolitan France, Benelux, rest of Europe, and internationally. The company operates through Network, Maintenance, Transavia, and Other segments. It also offers airframe and engine maintenance services; component support services comprising electronic, mechanical, pneumatic, hydraulic, etc.; and other services, as well as operates point-to-point flights to/from the Netherlands and France. As of December 31, 2021, it operated a fleet of 332 aircraft. The company was founded in 1919 and is headquartered in Paris, France.
How the Company Makes MoneyAir France KLM generates revenue primarily through the sale of passenger tickets, which constitutes the largest portion of its income. The company operates a comprehensive network of routes, allowing it to cater to both international and domestic travelers. Key revenue streams include cargo services, where the airline transports goods and freight, and ancillary services such as baggage fees, seat selection fees, and onboard sales. Additionally, the company benefits from its loyalty program, Flying Blue, which generates revenue through partnerships with hotels, car rental services, and retail brands. Strategic alliances with other airlines, including membership in the SkyTeam global airline alliance, further enhance its revenue through code-sharing agreements and joint marketing initiatives, increasing passenger volume and operational efficiency.
Air France KLM Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong overall performance for Air France-KLM with significant revenue growth, successful premiumization strategies, and strategic expansions through partnerships and acquisitions. However, the company faces challenges, particularly in the Transavia segment and with geopolitical and economic headwinds.Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Air France-KLM reported a revenue increase of 6.2% in Q2 2025, with an operating income of EUR 736 million, up EUR 223 million year-over-year.
Improved Financial Metrics
Operating margin stood at 8.7%. Adjusted operating free cash flow reached EUR 0.7 billion for H1 2025, and leverage ratio decreased to 1.5x.
Premiumization Success
Revenue from premium products increased by nearly 3 percentage points, with La Premiere and Business Class revenues growing by 11%. Premium Economy saw a 27% revenue growth.
Strategic Partnerships and Expansions
Air France-KLM plans to increase its stake in SAS to 60.5%, expanding its footprint in Northern Europe. New partnerships with Saudia, AerCap, Riyadh Air, Qantas, and IndiGo were announced.
Strong Cash Flow and Debt Management
A net debt reduction of EUR 200 million was achieved, and the leverage ratio is now at 1.5x. A EUR 500 million hybrid was issued at 5.75% to repay Apollo.
Negative Updates
Challenges in Transavia
Transavia faced headwinds with a EUR 25 million impact from a strike, competition to Spain, and increased Schiphol tariffs moving passengers to Germany and Brussels.
Geopolitical and Economic Headwinds
Geopolitical tensions, rising taxes, and airport charges presented ongoing challenges. The company faced headwinds from the NATO Summit, TSBA in France, and increased tariffs at Schiphol.
KLM Specific Challenges
KLM faced difficulties due to a NATO summit, maintenance-related one-offs, and a 41% increase in Schiphol tariffs. There were issues with the 787 aircraft and pressure on low-yielding segments.
Company Guidance
During the Air France-KLM Group's Q2 and Half Year 2025 Results Presentation, strong financial metrics were reported, highlighting a revenue increase of 6.2% and an operating income of EUR 736 million, up EUR 223 million year-over-year. The operating margin was 8.7%, with adjusted operating free cash flow reaching EUR 0.7 billion for the first half of 2025. The company's leverage ratio decreased to 1.5x, aligning with their target range. Air France-KLM's premiumization strategy contributed significantly, with revenue from premium offerings increasing by nearly 3 percentage points, and La Premiere and Business Class revenues growing by 11%. Premium Economy cabins saw a 27% revenue growth, the highest among all cabins. Corporate travel demand rose by 6% year-on-year. The group reported a robust cash flow, reducing net debt by EUR 200 million in the quarter, and maintaining a strong cash position of EUR 9.4 billion. The company also reaffirmed its outlook for 2025, targeting a growth capacity of 4% to 5% and a low single-digit increase in unit costs.Air France KLM Financial Statement Overview
Summary
Air France KLM shows strong revenue growth and improved operational efficiency, but faces challenges with profitability and high leverage. The balance sheet is heavily leveraged, posing financial risks, while cash flow generation has improved significantly.Income Statement
Air France KLM has shown a positive trajectory in revenue growth, with a TTM revenue growth rate of 1.55%. The gross profit margin has improved to 22.76% in TTM, indicating better cost management. However, the net profit margin remains relatively low at 3.18%, suggesting limited profitability. The EBIT and EBITDA margins have improved, reflecting operational efficiency gains.65
Positive
Balance Sheet
The balance sheet reveals significant leverage with a negative debt-to-equity ratio of -15.69 in TTM, highlighting high financial risk. The negative stockholders' equity indicates potential solvency issues. Return on equity is negative, reflecting challenges in generating returns for shareholders.40
Negative
Cash Flow
The cash flow statement shows a strong free cash flow growth rate of 290% in TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.27, suggesting adequate cash flow coverage of earnings. However, the free cash flow to net income ratio is relatively low at 0.18, indicating limited free cash flow relative to net income.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 32.47B | 31.46B | 30.02B | 26.39B | 14.31B | 11.09B |
| Gross Profit | 7.39B | 6.03B | 6.17B | 7.97B | 3.10B | 1.00M |
| EBITDA | 5.31B | 2.98B | 4.64B | 3.73B | -371.00M | -3.65B |
| Net Income | 1.03B | 317.00M | 934.00M | 728.00M | -3.27B | -7.03B |
Balance Sheet | ||||||
| Total Assets | 38.35B | 36.16B | 34.49B | 32.30B | 30.68B | 30.21B |
| Cash, Cash Equivalents and Short-Term Investments | 6.31B | 5.98B | 7.38B | 7.23B | 6.80B | 6.71B |
| Total Debt | 12.80B | 14.53B | 13.53B | 14.71B | 16.24B | 18.75B |
| Total Liabilities | 37.04B | 35.36B | 33.99B | 34.78B | 34.50B | 35.63B |
| Stockholders Equity | -816.00M | -1.76B | -2.05B | -3.00B | -3.82B | -5.43B |
Cash Flow | ||||||
| Free Cash Flow | 897.00M | -232.00M | -426.00M | 1.88B | -668.00M | -4.92B |
| Operating Cash Flow | 4.87B | 3.50B | 3.13B | 4.86B | 1.53B | -2.83B |
| Investing Cash Flow | -3.01B | -2.77B | -3.24B | -2.15B | -1.24B | -1.58B |
| Financing Cash Flow | -2.31B | -2.11B | -285.00M | -2.76B | -77.00M | 7.15B |
Air France KLM Technical Analysis
Neutral
1.50
Price Trends
1.39
Positive
1.17
Positive
1.02
Positive
Market Momentum
0.05
Positive
45.39
Neutral
0.76
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFLYY, the sentiment is Neutral. The current price of 1.5 is below the 20-day moving average (MA) of 1.61, above the 50-day MA of 1.39, and above the 200-day MA of 1.02, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 45.39 is Neutral, neither overbought nor oversold. The STOCH value of 0.76 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AFLYY.
Air France KLM Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $33.89B | 10.64 | 27.70% | ― | 4.23% | 13.13% | |
80 Outperform | $39.91B | 8.87 | 30.07% | 1.05% | 3.01% | -0.90% | |
75 Outperform | $29.94B | 14.43 | 27.12% | 1.41% | 10.61% | 37.32% | |
70 Outperform | $3.94B | 3.62 | -7.21% | ― | 6.69% | 268.38% | |
66 Neutral | $8.84B | 17.28 | -21.27% | ― | 1.50% | ― | |
64 Neutral | $10.73B | 15.65 | 7.61% | 2.01% | 2.80% | -14.92% | |
58 Neutral | $16.94B | 48.50 | 4.30% | 2.31% | 1.64% | 284.24% |
* Industrials Sector Average
Performance Comparison
AFLYY
Air France KLM
1.50
0.60
66.67%
DAL
Delta Air Lines
60.55
19.01
45.76%
RYAAY
Ryanair Holdings
60.29
16.23
36.84%
LUV
Southwest Airlines
31.12
2.08
7.16%
UAL
United Airlines Holdings
106.05
60.04
130.49%
AAL
American Airlines
12.86
2.06
19.07%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.