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AIR France KLM (FR:AF)
:AF

AIR France KLM (AF) AI Stock Analysis

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AIR France KLM

(LSE:AF)

Rating:71Outperform
Price Target:
€10.50
▲(6.06%Upside)
The overall score is driven by the company's strong technical analysis and valuation, indicating positive investor sentiment and undervaluation potential. However, financial performance concerns, particularly high leverage and negative equity, pose significant risks that temper the overall score.
Positive Factors
Financial Performance
AFKLM significantly beat expectations in core operating profit due to a positive margin surprise.
Revenue Growth
Higher passenger load factor and stronger yields contributed to revenue growth.
Negative Factors
Macroeconomic Conditions
Macroeconomic weakness and geopolitical tensions could curb discretionary spending on travel, affecting the company's growth.
Shareholder Returns
Potential for shareholder returns is dismal compared to peers, with uncertainty in free cash flow generation.

AIR France KLM (AF) vs. iShares MSCI France ETF (EWQ)

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 passenger and cargo transportation services. Passenger ticket sales form the largest portion of its income, driven by a diverse range of flight offerings, including economy, business, and first-class options. The company also earns from freight and mail transport, leveraging its extensive global network. Ancillary services such as baggage fees, seat selection charges, and in-flight services contribute additional income. Air France-KLM's maintenance, repair, and overhaul (MRO) operations provide services to third-party airlines, further diversifying its revenue streams. Strategic alliances and partnerships, such as membership in the SkyTeam airline alliance, enhance route connectivity and operational efficiencies, supporting revenue growth.

AIR France KLM Financial Statement Overview

Summary
Air France-KLM shows a strong recovery in revenue and operational efficiency with improving profitability margins. However, high leverage and negative equity on the balance sheet pose significant financial risks. Cash flow improvements are promising but need sustained stability.
Income Statement
72
Positive
The company shows a solid recovery in revenue with a notable growth rate from 2021 to 2025, driven by post-pandemic recovery in the transportation industry. The Gross Profit Margin is improving, currently at 18.15% for TTM, indicating efficient cost management. The Net Profit Margin for TTM is at 1.71%, showing profitability challenges but positive improvement from previous years of losses. EBIT and EBITDA margins are also improving, suggesting operational efficiencies. However, the net income remains volatile.
Balance Sheet
45
Neutral
The balance sheet reflects a high Debt-to-Equity ratio due to negative equity, raising concerns about financial leverage and risk. The company's equity ratio is negative, indicating liabilities exceed assets, a significant financial risk. The Return on Equity cannot be calculated due to negative equity. Despite these issues, the company maintains a substantial asset base.
Cash Flow
60
Neutral
The cash flow statement shows positive operating cash flow, with a strong Operating Cash Flow to Net Income ratio of 8.47 for TTM, highlighting effective cash generation from operations. Free Cash Flow has turned positive in TTM, indicating improved financial health. However, historical volatility in Free Cash Flow suggests past challenges in financial management.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue31.97B31.46B30.02B26.39B14.31B11.09B
Gross Profit5.80B4.99B6.17B7.97B3.10B1.00M
EBITDA4.55B4.26B4.64B3.73B-371.00M-3.65B
Net Income547.00M317.00M934.00M728.00M-3.27B-7.03B
Balance Sheet
Total Assets37.46B36.16B34.49B32.30B30.68B30.21B
Cash, Cash Equivalents and Short-Term Investments5.82B5.98B7.38B7.23B6.80B6.71B
Total Debt12.45B14.53B13.53B14.71B16.24B18.75B
Total Liabilities36.80B35.36B33.99B34.78B34.50B35.63B
Stockholders Equity-1.95B-1.76B-2.05B-3.00B-3.82B-5.43B
Cash Flow
Free Cash Flow230.00M-232.00M-426.00M1.88B-668.00M-4.92B
Operating Cash Flow4.63B3.50B3.13B4.86B1.53B-2.83B
Investing Cash Flow-3.07B-2.77B-3.24B-2.15B-1.24B-1.58B
Financing Cash Flow-2.39B-2.11B-285.00M-2.76B-77.00M7.15B

AIR France KLM Technical Analysis

Technical Analysis Sentiment
Positive
Last Price9.90
Price Trends
50DMA
8.63
Positive
100DMA
8.74
Positive
200DMA
8.40
Positive
Market Momentum
MACD
0.16
Negative
RSI
68.91
Neutral
STOCH
95.91
Negative
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 9.9 is above the 20-day moving average (MA) of 8.78, above the 50-day MA of 8.63, and above the 200-day MA of 8.40, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 68.91 is Neutral, neither overbought nor oversold. The STOCH value of 95.91 is Negative, 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

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
FRAF
71
Outperform
€2.62B5.64
5.36%-30.59%
65
Neutral
$10.69B15.755.51%1.90%2.72%-26.43%
$163.05B34.4921.75%1.64%
€101.44B30.6912.92%1.61%
€11.94B14.932.50%5.33%
€7.78B23.146.11%3.97%
€110.98B62.29-6.13%1.09%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FR:AF
AIR France KLM
9.90
1.54
18.47%
EADSF
Airbus Group SE
207.40
63.67
44.30%
GB:0NWF
Air Liquide
175.94
14.87
9.23%
GB:0NQF
Renault
40.74
-7.19
-15.00%
GB:0KBZ
Rexel SA
26.10
2.22
9.30%
GB:0IU8
SAFRAN SA
269.95
66.02
32.37%
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.Date of analysis: Jul 02, 2025