AIR France KLM (AF) AI Stock Analysis

• Market Cap: €3.22B
• Dividend Yield: N/A
• Average Volume (3M): 1.01M
• Price to Earnings (P/E): 2.1
• Beta (1Y): 1.58
• Revenue Growth: 5.52%
• EPS Growth: 1001.19%
• Country: FR
• Employees: 78,399
• Sector: General
• Sector Strength: N/A
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 1.55
• Shares Outstanding: 262,769,870
• 10 Day Avg. Volume: 1,113,403
• 30 Day Avg. Volume: 1,005,345
• PEG Ratio: <0.01
• Price to Book (P/B): -3.09
• Price to Sales (P/S): 0.09
• P/FCF Ratio: 26.42
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €12.75
• Price Target Upside: 3.66% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): 4.3
• Revenue Forecast (FY): €34.53B

• Rating: 67 Neutral
• Price Target: €14.00 ▲(13.82% Upside)
• Action: Reiterated Date: 02/20/26
• Date: Action: Reiterated 02/20/26

The score is driven primarily by mixed financial quality: improving earnings and positive operating cash flow are offset by a weak balance sheet with high leverage and negative equity. Technicals are constructive with price above key moving averages and positive MACD, while valuation is a positive due to the very low P/E.

Positive Factors

Revenue recovery & growth

Sustained revenue expansion into 2025 signals durable demand recovery and route/network restoration. Consistent top-line growth improves fixed-cost absorption and operating leverage, strengthening the group's ability to fund operations and invest in capacity over the medium term.

Consistent operating cash flow

Positive and improving operating cash flow provides a reliable internal source to service debt, cover working capital, and sustain operations through cycles. This cash generation is a durable underpinning for financial resilience even if free cash flow and balance-sheet repair lag.

Diversified revenue mix & alliances

A multi-stream model—passenger fares, cargo, ancillaries, and alliance/codeshare distribution—reduces single-market exposure and smooths revenue volatility. Network partnerships expand destinations cost-effectively and support loyalty programs that underpin repeat demand.

Negative Factors

High leverage & negative equity

Negative shareholder equity and elevated debt materially constrain financial flexibility. Accumulated deficits increase refinancing and solvency risk in downturns, raise cost of capital, and limit the group's ability to invest or pursue strategic moves without external funding.

Volatile and weak free cash flow

Inconsistent free cash flow undermines capacity to reduce debt, build liquidity buffers, or sustain discretionary investment. Even with positive operating cash flow, capex and working-capital swings leave limited room to deleverage, increasing exposure to rate rises and funding stress.

Thin, cyclical margins

Persistently thin and cyclical margins limit earnings resilience and the ability to self-insure against shocks like fuel spikes or demand slumps. Margin volatility means profitability gains are fragile and require sustained demand and disciplined cost control to be durable.

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 passenger ticket sales, which constitute the bulk of its income. The company operates various fare classes for both economy and business travelers, allowing it to cater to different segments of the market. In addition to passenger services, the airline also earns revenue from cargo services, providing freight transport solutions for goods and commodities. Ancillary revenue streams, including fees for baggage, seat selection, and in-flight services, contribute significantly to its earnings. Furthermore, partnerships and alliances with other airlines, such as the SkyTeam alliance, enhance connectivity and expand its market reach, while codeshare agreements enable the airline to offer a broader range of destinations. The company also benefits from frequent flyer programs, generating loyalty and repeat business among travelers.

AIR France KLM Financial Statement Overview

Summary

Income statement recovery is solid (revenue expansion and improved profitability into 2025), and operating cash flow is consistently positive. However, the balance sheet is a major constraint with high leverage and persistently negative shareholder equity, and free cash flow has been volatile and recently weak.

Income Statement

Revenue has recovered strongly versus the trough years, with continued expansion through 2025. Profitability also improved meaningfully: 2025 shows solid operating profit and a much stronger bottom line than 2024, reflecting better cost absorption and operating leverage. That said, margins remain relatively thin for an airline and have been volatile over the cycle (deep losses in 2020–2021 and lower gross profitability versus 2022–2023), which keeps the score below top-tier.

Balance Sheet

Leverage remains a key overhang: total debt is high and, critically, shareholder equity is negative across all periods shown, which is a clear balance-sheet weakness and limits financial flexibility. While total assets have grown, the negative equity position indicates accumulated deficits and leaves the company more exposed to downturns, refinancing risk, and earnings volatility typical of the airline industry.

Cash Flow

Operating cash flow is consistently positive from 2021–2025 and improved into 2025, which supports debt service and ongoing operations. However, free cash flow has been volatile and recently weak: 2024 was negative and 2025 is only modestly positive with a sharp decline versus the prior year, indicating heavier reinvestment and/or working-capital pressure. Overall cash generation is adequate but not yet consistently strong after capital spending.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	33.01B	31.46B	30.02B	26.39B	14.31B
Gross Profit	3.94B	4.99B	6.17B	7.97B	3.10B
EBITDA	5.28B	4.02B	4.64B	3.73B	-371.00M
Net Income	1.59B	317.00M	934.00M	728.00M	-3.27B
Balance Sheet
Total Assets	39.45B	36.16B	34.49B	32.30B	30.68B
Cash, Cash Equivalents and Short-Term Investments	6.04B	5.98B	7.38B	7.23B	6.80B
Total Debt	22.17B	14.53B	13.53B	14.71B	16.24B
Total Liabilities	38.36B	35.36B	33.99B	34.78B	34.50B
Stockholders Equity	-983.00M	-1.76B	-2.05B	-3.00B	-3.82B
Cash Flow
Free Cash Flow	115.00M	-232.00M	-426.00M	1.88B	-668.00M
Operating Cash Flow	4.56B	3.50B	3.13B	4.86B	1.53B
Investing Cash Flow	-3.03B	-2.77B	-3.24B	-2.15B	-1.24B
Financing Cash Flow	-1.62B	-2.11B	-285.00M	-2.76B	-77.00M

AIR France KLM Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:AF, the sentiment is Positive. The current price of 12.3 is above the 20-day moving average (MA) of 12.16, above the 50-day MA of 11.60, and above the 200-day MA of 11.24, indicating a bullish trend. The MACD of 0.41 indicates Negative momentum. The RSI at 52.96 is Neutral, neither overbought nor oversold. The STOCH value of 70.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:AF.

AIR France KLM Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SAF	77 Outperform	€141.75B	19.80	35.36%	0.97%	14.19%	161.87%
AI	72 Outperform	€103.03B	29.22	13.92%	2.06%	1.46%	12.62%
RXL	70 Neutral	€10.81B	18.46	4.63%	3.61%	2.16%	-64.02%
AF	67 Neutral	€3.22B	2.11	―	―	5.52%	1001.19%
AIR	66 Neutral	€145.04B	27.86	23.44%	1.53%	7.05%	54.98%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
RNO	48 Neutral	€9.30B	-0.80	-46.54%	6.19%	8.44%	-937.75%