Air France KLM (AFLYY) AI Stock Analysis

• Market Cap: $3.48B
• Dividend Yield: N/A
• Average Volume (3M): 4.33K
• Price to Earnings (P/E): 3.2
• Beta (1Y): 0.66
• Revenue Growth: 7.97%
• EPS Growth: 970.83%
• Country: US
• Employees: 78,399
• Sector: Industrials
• Sector Strength: 72
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 0.10
• Shares Outstanding: 2,627,698,700
• 10 Day Avg. Volume: 4,976
• 30 Day Avg. Volume: 4,330
• PEG Ratio: -0.09
• Price to Book (P/B): -1.16
• Price to Sales (P/S): 0.07
• P/FCF Ratio: -8.84
• Enterprise Value/Market Cap: 14.36
• Enterprise Value/Revenue: 1.46
• Enterprise Value/Gross Profit: 7.31
• Enterprise Value/Ebitda: 8.87
• 1Y Price Target: $11.77
• Price Target Upside: 784.96% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: $1.50 ▲(12.78% Upside)

Air France KLM's stock is supported by strong technical indicators and an attractive valuation, suggesting potential upside. However, financial performance is hindered by high leverage and negative equity, which pose risks to financial stability. The neutral sentiment from the earnings call reflects both achievements and challenges.

Positive Factors

Revenue Growth

Sustained revenue growth indicates robust demand recovery and effective market strategies, enhancing long-term financial stability.

Fleet Renewal

Fleet renewal with fuel-efficient aircraft reduces operational costs and environmental impact, supporting long-term competitiveness.

Loyalty Program Success

A strong loyalty program enhances customer retention and brand loyalty, contributing to stable revenue streams and market position.

Negative Factors

High Leverage

High leverage and negative equity can limit financial flexibility and increase risk, potentially impacting long-term financial health.

Decline in Free Cash Flow

A decline in free cash flow reduces the ability to invest in growth or reduce debt, impacting long-term financial sustainability.

Operational Challenges

Persistent operational challenges can strain resources and hinder efficiency, affecting long-term profitability and service reliability.

Air France KLM Business Overview & Revenue Model

Company Description

Air 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 Money

Air France KLM generates revenue primarily through ticket sales from passenger flights, which constitute the bulk of its income. Additional revenue streams include cargo services, where the airline transports freight on its passenger and dedicated cargo flights, and ancillary services that include fees from baggage, in-flight services, and partnerships with hotels and car rental companies. The company also benefits from codeshare agreements and alliances, particularly through its membership in the SkyTeam alliance, which allows it to expand its reach and share resources with other airlines. Significant partnerships with global travel agencies and corporate clients further enhance its revenue through group travel arrangements and corporate contracts.

Air France KLM Financial Statement Overview

Summary

Air France KLM shows positive revenue growth and improved profitability metrics, but faces significant challenges with high leverage and negative equity, impacting financial stability. Operational cash flows are robust, yet the decline in free cash flow highlights the need for better cash management.

Income Statement

Air France KLM shows a positive revenue growth rate of 5.51% in the TTM, indicating a recovery trend post-pandemic. The gross profit margin is stable at 20.02%, and the net profit margin has improved to 2.94%. However, the airline industry remains highly competitive, and the EBIT margin of 6.95% suggests moderate operational efficiency. The company has shown resilience, but profitability remains a challenge.

Balance Sheet

The balance sheet reflects significant financial leverage with a negative equity position, leading to a concerning debt-to-equity ratio of -11.06 in the TTM. The negative return on equity indicates ongoing challenges in generating returns for shareholders. The equity ratio is also negative, highlighting potential financial instability. The company needs to address its high leverage to improve financial health.

Cash Flow

Operating cash flow is strong at €5.1 billion in the TTM, providing a solid base for operations. However, free cash flow has declined by 17.31%, and the free cash flow to net income ratio is relatively low at 0.15, indicating limited cash available for expansion or debt reduction. The company needs to enhance its cash flow management to support long-term growth and stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	34.25B	31.46B	30.02B	26.39B	14.31B	11.09B
Gross Profit	6.84B	6.03B	6.17B	7.97B	3.10B	1.00M
EBITDA	5.64B	2.98B	4.64B	3.73B	-371.00M	-3.65B
Net Income	1.08B	317.00M	934.00M	728.00M	-3.27B	-7.03B
Balance Sheet
Total Assets	45.28B	36.16B	34.49B	32.30B	30.68B	30.21B
Cash, Cash Equivalents and Short-Term Investments	5.88B	5.98B	7.38B	7.23B	6.80B	6.71B
Total Debt	19.39B	14.53B	13.53B	14.71B	16.24B	18.75B
Total Liabilities	44.53B	35.36B	33.99B	34.78B	34.50B	35.63B
Stockholders Equity	-1.75B	-1.76B	-2.05B	-3.00B	-3.82B	-5.43B
Cash Flow
Free Cash Flow	741.71M	-232.00M	-426.00M	1.88B	-668.00M	-4.92B
Operating Cash Flow	5.10B	3.50B	3.13B	4.86B	1.53B	-2.83B
Investing Cash Flow	-2.96B	-2.77B	-3.24B	-2.15B	-1.24B	-1.58B
Financing Cash Flow	-1.66B	-2.11B	-285.00M	-2.76B	-77.00M	7.15B

Air France KLM Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.33
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFLYY, the sentiment is Positive. The current price of 1.33 is above the 20-day moving average (MA) of 1.31, above the 50-day MA of 1.27, and above the 200-day MA of 1.21, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 54.53 is Neutral, neither overbought nor oversold. The STOCH value of 26.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AFLYY.

Air France KLM Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RYAAY	83 Outperform	$36.54B	14.22	28.67%	1.37%	14.75%	71.73%
DAL	80 Outperform	$46.26B	9.99	28.52%	0.96%	4.33%	-1.58%
UAL	74 Outperform	$36.92B	11.42	25.59%	―	4.24%	20.29%
AFLYY	68 Neutral	$3.48B	3.24	―	―	7.97%	970.83%
LTM	67 Neutral	$15.53B	13.00	135.74%	3.50%	6.81%	58.22%
LUV	66 Neutral	$21.35B	62.91	4.22%	1.73%	0.65%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Air France KLM Corporate Events

Air France-KLM Reports Stable Q3 2025 Earnings

Air France-KLM SA is a leading airline group operating in the aviation sector, known for its extensive network of passenger and cargo services across the globe. In the third quarter of 2025, Air France-KLM reported stable operating results with a margin of 13.1%, driven by a 2.6% increase in group revenues to €9.2 billion. The company saw a 5.1% rise in capacity, although unit revenue at constant currency slightly decreased by 0.5% due to challenges in the Cargo and Transavia segments. The group maintained strong cash flow performance with €0.7 billion in recurring adjusted operating free cash flow and a solid cash position of €9.5 billion. Key financial highlights include an operating result of €1.2 billion, a leverage ratio of 1.6x, and ongoing fleet renewal efforts, with 32% of the fleet now consisting of next-generation aircraft. Looking ahead, Air France-KLM expects a 4-5% increase in capacity for 2025, with unit costs rising by a low single digit. The company remains focused on its premiumization strategy and sustainability initiatives, including fleet renewal and the rollout of free high-speed Wi-Fi on Air France flights.