AIR France KLM (AF) AI Stock Analysis

• Market Cap: €2.34B
• Dividend Yield: N/A
• Average Volume (3M): 1.01M
• Price to Earnings (P/E): 1.9
• Beta (1Y): 1.73
• 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: €12.18
• Price Target Upside: 36.49% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): 4.1
• Revenue Forecast (FY): €34.55B

• Rating: 58 Neutral
• Price Target: €9.50 ▲(6.50% Upside)
• Action: Reiterated Date: 03/03/26
• Date: Action: Reiterated 03/03/26

The score is held back mainly by balance-sheet risk (negative equity and high leverage) and only moderate cash-flow quality despite improving operating results. Technicals are neutral-to-mixed with price below key moving averages, while valuation is a notable positive due to the very low P/E.

Positive Factors

Revenue recovery & improving profitability

A sustained revenue recovery and materially better profitability into 2025 indicate the group is regaining pricing power and demand across its network. That improves operating leverage and supports structurally stronger earnings capacity versus the pandemic trough years over the next 2–6 months.

Consistent operating cash flow

Reliable positive operating cash flow across multiple years provides an enduring source of liquidity to service debt, support operations and fund necessary reinvestment. This steadiness underpins resilience versus cyclical revenue swings and supports medium-term financial stability.

Diversified airline business model & network scale

Air France-KLM’s mix of passenger, cargo, MRO and other airline services plus large dual-brand network and alliance partnerships creates multiple revenue streams and network effects. That diversification reduces single-segment risk and preserves structural competitive advantages over months ahead.

Negative Factors

Negative shareholder equity

Persistently negative equity and high leverage materially constrain financial flexibility, increase refinancing and covenant risk, and leave the company more exposed to downturns. This structural balance-sheet impairment is a long-running overhang on strategic options and resilience.

Volatile and weak free cash flow

While operating cash flow is positive, volatile and often weak free cash flow limits the company’s ability to reduce debt, invest in fleet or return capital. This inconsistent FCF profile reduces capacity to repair the balance sheet and weakens long-term financial flexibility.

Thin, cyclical margins

Relatively thin and cyclical margins mean profits are sensitive to fuel, labor and demand swings. That cyclical margin profile reduces earnings durability, limits cash buffers in downturns, and makes long-term planning and deleveraging harder for management.

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 makes money primarily by selling air transportation and related travel services. Its main revenue streams include: (1) Passenger revenue: Ticket sales for scheduled flights across short-/medium-haul and long-haul routes, including revenues from different cabin classes and fare types, and ancillary revenues linked to travel (e.g., paid seat selection, baggage fees, onboard products/services, and other optional travel add-ons). Passenger revenue is influenced by passenger volumes, network capacity, load factors, pricing/yield management, and route mix. (2) Cargo revenue: Sales of air freight capacity on dedicated freighter operations and belly cargo capacity on passenger aircraft; revenue depends on cargo volumes, freight yields, and global trade demand. (3) Maintenance services: Revenue from providing aircraft maintenance, repair, and overhaul (MRO) services; this can include work performed for the group’s own fleets and third-party airline customers, with earnings driven by shop visits, contract scope, parts, and labor. (4) Other airline-related revenue: Income from complementary activities such as ground handling and various service/commission income tied to airline operations and distribution. Additional factors that can contribute to earnings include commercial partnerships such as alliances, joint ventures, and code-share arrangements that can support network reach and revenue optimization on certain routes; if specific partnership structures or financial contributions are not publicly available in the requested context, null.

AIR France KLM Financial Statement Overview

Summary

Income statement trends are improving (strong revenue recovery and better profitability into 2025), and operating cash flow is consistently positive. However, the balance sheet is a major constraint with persistently negative shareholder equity and high leverage, 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: Negative
• Last Price: 8.92
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:AF, the sentiment is Negative. The current price of 8.92 is below the 20-day moving average (MA) of 10.63, below the 50-day MA of 11.06, and below the 200-day MA of 11.29, indicating a bearish trend. The MACD of -0.65 indicates Positive momentum. The RSI at 29.97 is Positive, neither overbought nor oversold. The STOCH value of 13.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	€117.40B	17.32	51.15%	0.97%	14.19%	161.87%
AI	72 Outperform	€96.67B	26.28	13.87%	2.06%	1.46%	12.62%
RXL	70 Neutral	€9.19B	16.83	4.63%	3.61%	2.16%	-64.02%
AIR	61 Neutral	€126.68B	30.00	21.22%	1.53%	7.05%	54.98%
AF	58 Neutral	€2.34B	1.91	―	―	5.52%	1001.19%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
RNO	48 Neutral	€8.00B	-0.89	-46.54%	6.19%	8.44%	-937.75%