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Air France KLM
(OTC:AFLYY)
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Rating:58Neutral
Price Target:
$1.50
▲(11.94% Upside)
Action:Reiterated
Date:08/03/26
The score is held back primarily by high leverage and uneven free-cash-flow generation despite improved profitability and strong operating cash flow. Valuation is a clear positive given the very low P/E, while technicals are mildly weak/neutral. Earnings-call commentary is supportive on revenue/cash and execution, but the large fuel headwind and cost/supply-chain issues add meaningful near-term risk.
Positive Factors
Consistent operating cash generation
Sustained positive operating cash flow (~EUR/USD 4.4bn TTM) provides durable funding for working capital, hedges, capex and interest service. This underpins operability through cycles, supports liquidity buffers and enables gradual deleveraging or strategic investments over months.
Negative Factors
Very high leverage and thin equity
Extremely elevated leverage and a thin/negative equity cushion materially constrain financial flexibility. This increases refinancing and covenant risk, limits ability to absorb shocks or fund strategic moves without issuing debt or equity, and raises structural exposure to adverse cost or demand shifts.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent operating cash generation
Sustained positive operating cash flow (~EUR/USD 4.4bn TTM) provides durable funding for working capital, hedges, capex and interest service. This underpins operability through cycles, supports liquidity buffers and enables gradual deleveraging or strategic investments over months.
Read all positive factors
Air France KLM (AFLYY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.65B
Dividend YieldN/A
Average Volume (3M)8.27K
Price to Earnings (P/E)2.9
Beta (1Y)1.03
Revenue Growth12.59%
EPS Growth15.99%
CountryUS
Employees81,992
SectorIndustrials
Sector Strength72
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)0.04
Shares Outstanding2,627,698,700
10 Day Avg. Volume10,717
30 Day Avg. Volume8,272
Financial Highlights & Ratios
PEG Ratio-0.50
Price to Book (P/B)-29.80
Price to Sales (P/S)0.92
P/FCF Ratio265.06
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.35
Revenue Forecast (FY)$40.46B
Air France KLM Business Overview & Revenue Model
Company Description
Air France-KLM S.A., operating with its affiliated companies, specializes in providing scheduled air transportation for both passengers and freight. Its extensive network spans Metropolitan France, the Benelux region, the broader European continen...
How the Company Makes Money
Air France-KLM primarily makes money by selling air transportation and related services across several major revenue streams:\n\n1) Passenger airline revenue (core)\n- Ticket sales: The largest revenue driver is selling seats on scheduled flights ...
Air France KLM Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call presented several strong commercial and financial positives: double-digit revenue growth, robust premium and cargo performance, solid H1 free cash flow (~EUR 928m) and a strengthened liquidity position (~EUR 10.3bn). Operationally the group is benefitting from fleet renewal, premiumization and successful pricing that recaptured the majority of a sharp Q2 fuel shock. Offsetting these gains are notable headwinds: a sizable expected full-year fuel build (~USD 1.9bn), maintenance and spare-part supply issues increasing costs, Transavia's margin pressure, and booking/timing volatility. On balance the highlights (revenue growth, cash strength, high fuel recapture, strategic deals and loyalty wins) materially outweigh the lowlights, though execution risks and fuel volatility remain key near-term watch points.Positive Updates
Revenue Growth
Group revenues increased nearly 10% year-over-year to EUR 9.3 billion in Q2 2026, supported by growth across all businesses and 28+ million passengers in the quarter.
Negative Updates
Elevated Fuel Headwind for Full Year
Despite strong Q2 recapture, management expects full-year jet fuel build of roughly USD 1.9 billion higher versus 2025; Q3 fuel year-over-year impact cited at ~EUR 600 million (improved vs prior EUR 800m guidance) and Q4 at ~EUR 500 million.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Group revenues increased nearly 10% year-over-year to EUR 9.3 billion in Q2 2026, supported by growth across all businesses and 28+ million passengers in the quarter.
Read all positive updates
Company Guidance
Air France‑KLM’s guidance highlighted a full‑year 2026 fuel headwind of roughly USD 1.9bn vs 2025 (Q3 YoY fuel impact ~EUR 600m, Q4 ~EUR 500m) even after Q2 management recaptured ~85–86% of the incremental fuel bill; group capacity is guided at +2–3% (long‑haul ~+2%, short/medium ~‑1%, Transavia ~+8%), unit cost guidance 0% to +2% (with ~0.5% from premiumization), capex below EUR 3bn and leverage targeted at 1.5–2x. Hedging stood at ~67% for 2026 and ~40% for 2027, with management citing a c.USD 1.6bn hedge benefit for the year; H1 recurring adjusted operating free cash flow was ~EUR 928m, cash of ~EUR 10.3bn and net debt roughly flat (leverage down ~0.1 since January). Q2 financials referenced as context included group revenues ~EUR 9.3bn (~+10%), adjusted operating profit EUR 484m (5.2% margin), >28m passengers in the quarter, cargo unit revenues +26.7% (cargo contribution ~EUR 100m), and management reiterated its mid‑term margin trajectory (targeting >8% in the medium term) while emphasizing continued pricing agility and cost discipline.Air France KLM Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
28
Negative
Cash Flow
55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 34.18B | 31.70B | 31.46B | 30.02B | 26.39B | 14.31B |
| Gross Profit | 4.94B | 3.79B | 6.03B | 6.17B | 7.97B | 3.10B |
| EBITDA | 5.30B | 5.07B | 2.98B | 4.64B | 3.73B | -371.00M |
| Net Income | 1.12B | 1.53B | 317.00M | 934.00M | 728.00M | -3.27B |
Balance Sheet | ||||||
| Total Assets | 41.61B | 39.43B | 36.16B | 34.49B | 32.30B | 30.68B |
| Cash, Cash Equivalents and Short-Term Investments | 5.96B | 6.04B | 5.98B | 7.38B | 7.23B | 6.80B |
| Total Debt | 13.71B | 22.16B | 14.53B | 13.53B | 14.71B | 16.24B |
| Total Liabilities | 38.82B | 38.35B | 35.36B | 33.99B | 34.78B | 34.50B |
| Stockholders Equity | 651.00M | -982.58M | -1.76B | -2.05B | -3.00B | -3.82B |
Cash Flow | ||||||
| Free Cash Flow | 356.66M | 110.46M | -232.00M | -426.00M | 1.88B | -668.00M |
| Operating Cash Flow | 4.43B | 4.38B | 3.50B | 3.13B | 4.86B | 1.53B |
| Investing Cash Flow | -2.22B | -2.91B | -2.77B | -3.24B | -2.15B | -1.24B |
| Financing Cash Flow | -1.95B | -1.55B | -2.11B | -285.00M | -2.76B | -77.00M |
Air France KLM Technical Analysis
Neutral
1.34
Price Trends
1.43
Negative
1.29
Positive
1.29
Positive
Market Momentum
>-0.01
Positive
46.29
Neutral
7.60
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 1.34 is below the 20-day moving average (MA) of 1.40, below the 50-day MA of 1.43, and above the 200-day MA of 1.29, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 46.29 is Neutral, neither overbought nor oversold. The STOCH value of 7.60 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $57.60B | 14.16 | 19.33% | 0.91% | 10.28% | -12.67% | |
75 Outperform | $14.90B | 9.65 | 98.01% | 3.05% | 20.16% | 39.18% | |
70 Outperform | $39.68B | 11.40 | 22.50% | ― | 8.48% | 6.74% | |
68 Neutral | $28.91B | 13.44 | 20.27% | 1.74% | 13.24% | -1.27% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | $3.65B | 2.91 | -542.96% | ― | 12.59% | 15.99% | |
54 Neutral | $21.21B | 26.11 | 11.27% | 1.60% | 9.46% | 137.74% |
* Industrials Sector Average
AFLYY
Air France KLM
1.37
-0.35
-20.44%
DAL
Delta Air Lines
85.70
25.85
43.20%
RYAAY
Ryanair Holdings
55.41
-9.94
-15.21%
LUV
Southwest Airlines
42.49
11.48
37.03%
UAL
United Airlines Holdings
118.72
16.53
16.18%
LTM
LATAM Airlines Group SA Sponsored ADR
50.54
5.99
13.46%
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.