Air France-KLM returns to profit growth in Q3; raises FY fuel cost forecast

Overview

• France-Netherlands airline group's Q3 revenue rose 7.6% yr/yr to €9.9 bln

• Adjusted operating profit increased to €1,346 mln, returning to growth as revenue growth offset higher fuel costs

• KLM announced new structural measures to improve operational and financial performance

Outlook

• Air France-KLM expects FY 2026 capacity up by about 2% versus 2025, revised from +2% to +3%

• Company forecasts FY 2026 unit cost up about 1%, including 0.5% from premiumization (previously 0% to +2%)

• FY 2026 fuel bill expected at USD 9.2bln, up from previous USD 8.9bln guidance

Result Drivers

• RESILIENT TRAVEL DEMAND - Co said strong demand for travel across key markets drove unit revenue growth in both Passenger and Cargo businesses

• PREMIUMIZATION - Co attributed higher yields and unit revenue growth to continued focus on premium cabins and services

• COST DISCIPLINE - Co said strict cost management kept unit costs stable despite higher fuel prices and premiumization

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 11 "hold" and 4 "sell" or "strong sell"

• The average consensus recommendation for the airlines peer group is "buy."

• Wall Street's median 12-month price target for Air France KLM SA is €12.15, about 7.8% above its November 4 closing price of €11.28

• The stock recently traded at 3 times the next 12-month earnings vs. a P/E of 3 three months ago

Reuters Recommended Reads

• Nov 5 - KLM sees 1,000 fewer jobs in push to restore profitability

• Nov 3 - Lufthansa cuts 2026 outlook as jet fuel bill hits €9.3 billion

• Nov 2 - Ireland's Ryanair H1 profit falls 15% as fuel costs rise

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)