Air France-KLM

Air France-KLM

25 September 2018Reading time: 2 minutes

Air-France-KLM is one of the leading airline group in the world, actually the group operates the largest network between Europe and the rest of the world serving 129 long-haul destinations most of them from its two intercontinental hubs located in Amsterdam-Schiphol and Paris-CDG. The two international airport are both in the top 4 of the largest connections platform in Europe. The group is represented in all major markets, moreover there is no imbalance in group’s revenue because no market account for more than a third of revenue in the group.

The Company has a portfolio of strong brands who benefits from state of the art reputation across the world. The newest brand of the company is Joon a low cost subsidiary of Air-France targeting mostly long-haul destination from France. The group expects Joon to drive further growth by maintaining routes with low profitability and re-open closed route. Moreover, Joon is seen as the laboratory of the Group where Air France-KLM can experiment new services, technology, catering and cabin design.

On the short haul market, the group made a strong performance with Transavia, which is actually the leading low cost airline in France & the Netherlands. Transavia carried more than 7.3 million passengers during HY2018, which represents an increase of 7.4% compared to HY2017.

In 2018 Air France-KLM offered more than 314 destinations in over 116 countries including 78 new routes. However, the global outlook remains uncertain especially due to the geopolitical context and rising fuel prices. Despite an expected increase of the kerosene’s bill by EUR 450 million in 2018 compared to 2017, the group targets a net debt reduction in 2018.

The stock price of Air France-KLM has fallen strongly in the past due to strikes in France which impacted the group’s revenue by EUR 335 million in HY2018. However, the stocks has strongly risen recently. The future price of the stock is subject to several political, industrial and sector specific as well as economic factors. Investors should consider these risks when making their investment decisions. Developments can be different at any time than investors anticipated on, which could result in capital losses.

Vontobel products for Air France-KLM are available at DEGIRO.

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03/03/2021 04:00:58