Air France-KLM maintains financial forecast for the year, despite uncertainty, as the group posted revenue for the first quarter totalling €7.2bn ($8.18bn), an increase of 7.7% on the same period of the year prior.
As well as holding firm on its financial outlook for the year, the airline group also reaffirmed that it will not be moving any capacity as of yet, in light of modest shifts toward Canada and Latin America, with Canadian routes said to be “holding up well”.
“Premium cabins, including business and premium economy, are outperforming expectations across all long-haul markets, including the US, while softness remains concentrated in economy class, in particular on transatlantic routes,” said Ben Smith, Air France-KLM CEO.
The group CEO also stated on its first quarter earnings call that lower pricing is expected to have a positive stimulative effect on demand, though it is proceeding cautiously as some customers remain hesitant to book. Three weeks ago, while talking to Bloomberg TV, Smith stated the company will be lowering economy class fares, again noting that this is in light of the company experiencing slight softness on transatlantic routes in economy class cabins.
Smith also highlighted that the airline group has lower exposure to the US market in comparison to other European competitors. In total, 26% of the company’s capacity is on routes to and from the US, Smith noted that this is lower to the group’s two major competitors in Europe whose exposure ranges between 37-47%.
This outlook posted by the Franco-Dutch airline group aligns with those posted by other European airlines earlier this week. Both Finnair and the Lufthansa Group stuck firm with guidance for the remainder of 2025, despite political and economic uncertainty that has been triggered by the implementation of US tariffs.
Air France-KLM stated that sustained demand can be attributed to supporting a rise in revenue across all businesses, while summer ticket sales allowed for an improvement in cash flow generation. During the quarter EBITDA rose by €220 million ($249.9 million) to €396 million ($449.9 million), while the operating result improved by €161 million ($182.9 million) to a loss of €328 million ($372.6 million).
The group’s operating margin improved by 2.8 percentage points to a negative 4.6%. The company reported a net loss of €249 million ($282.9 million), narrowing losses by €231 million ($262.4 million) compared to the same period a year prior.
Unit revenue per available seat kilometre (ASK) increased 3.4%, while unit cost (excluding fuel, ETS, and at constant currency) rose 2.1%.
For the first quarter, the group reported a positive operating free cash flow of just over €1bn ($1.13bn), mainly driven by a positive working capital coming from the ticket sales, although impacted by the deferrals inherited from the pandemic which amounted to €122 million ($127.2 million). Net capex was at €896 million ($1.01bn).
Operationally, Air France-KLM carried 21.8 million passengers in the first quarter, up 4.5%on the year prior, with capacity rising 3.8% and traffic 3.3% and the group's average load factor stable at 86%.