Air France KLM (AFLYY) AI Stock Analysis

Air France KLM

(Other OTC:AFLYY)

Select Model

Rating:58Neutral

Price Target:$1.00▼(-14.21% Downside)

Action:reiterated

Date:08/03/26

The score is held back primarily by high leverage and uneven free-cash-flow generation despite improved profitability and strong operating cash flow. Valuation is a clear positive given the very low P/E, while technicals are mildly weak/neutral. Earnings-call commentary is supportive on revenue/cash and execution, but the large fuel headwind and cost/supply-chain issues add meaningful near-term risk.

Positive Factors

Revenue and earnings recoveryThe post-2021 recovery has restored positive earnings and operating profitability, while TTM revenue remains well above prior years. This provides a stronger base for funding operations and fleet investment, although results will still depend on maintaining pricing and controlling costs.

Negative Factors

Very high leverage and thin equity cushionThe highly leveraged balance sheet leaves little equity protection if demand, fuel costs or operating performance deteriorate. Large debt obligations can absorb cash that might otherwise fund growth, reduce strategic flexibility and make the company more sensitive to refinancing and cyclical pressures.

Air France KLM (AFLYY) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $28.89B
Dividend Yield: ―
Average Volume (3M): 31.00K
Price to Earnings (P/E): 2.5
Beta (1Y): 1.08
Revenue Growth: 12.59%
EPS Growth: 15.99%
Country: US
Employees: 81,992
Sector: Industrials
Sector Strength: 63
Industry: Airlines, Airports & Air Services

Air France KLM Business Overview & Revenue Model

Company Description

Air France-KLM S.A., operating with its affiliated companies, specializes in providing scheduled air transportation for both passengers and freight. Its extensive network spans Metropolitan France, the Benelux region, the broader European continent,...

How the Company Makes Money

Air France-KLM primarily makes money by selling air transportation and related services across several major revenue streams. (1) Passenger revenue: The largest component typically comes from transporting passengers on scheduled flights operated by A...

Air France KLM Earnings Call Summary

Earnings Call Date:Jul 29, 2026(Q2-2026)|% Change Since:-13.53%|Next Earnings Date:Nov 04, 2026

Earnings Call SentimentPositive

The call presented several strong commercial and financial positives: double-digit revenue growth, robust premium and cargo performance, solid H1 free cash flow (~EUR 928m) and a strengthened liquidity position (~EUR 10.3bn). Operationally the group is benefitting from fleet renewal, premiumization and successful pricing that recaptured the majority of a sharp Q2 fuel shock. Offsetting these gains are notable headwinds: a sizable expected full-year fuel build (~USD 1.9bn), maintenance and spare-part supply issues increasing costs, Transavia's margin pressure, and booking/timing volatility. On balance the highlights (revenue growth, cash strength, high fuel recapture, strategic deals and loyalty wins) materially outweigh the lowlights, though execution risks and fuel volatility remain key near-term watch points.

Positive Updates

Revenue Growth

Group revenues increased nearly 10% year-over-year to EUR 9.3 billion in Q2 2026, supported by growth across all businesses and 28+ million passengers in the quarter.

Negative Updates

Elevated Fuel Headwind for Full Year

Despite strong Q2 recapture, management expects full-year jet fuel build of roughly USD 1.9 billion higher versus 2025; Q3 fuel year-over-year impact cited at ~EUR 600 million (improved vs prior EUR 800m guidance) and Q4 at ~EUR 500 million.

Company Guidance

Air France‑KLM’s guidance highlighted a full‑year 2026 fuel headwind of roughly USD 1.9bn vs 2025 (Q3 YoY fuel impact ~EUR 600m, Q4 ~EUR 500m) even after Q2 management recaptured ~85–86% of the incremental fuel bill; group capacity is guided at +2–3% (long‑haul ~+2%, short/medium ~‑1%, Transavia ~+8%), unit cost guidance 0% to +2% (with ~0.5% from premiumization), capex below EUR 3bn and leverage targeted at 1.5–2x. Hedging stood at ~67% for 2026 and ~40% for 2027, with management citing a c.USD 1.6bn hedge benefit for the year; H1 recurring adjusted operating free cash flow was ~EUR 928m, cash of ~EUR 10.3bn and net debt roughly flat (leverage down ~0.1 since January). Q2 financials referenced as context included group revenues ~EUR 9.3bn (~+10%), adjusted operating profit EUR 484m (5.2% margin), >28m passengers in the quarter, cargo unit revenues +26.7% (cargo contribution ~EUR 100m), and management reiterated its mid‑term margin trajectory (targeting >8% in the medium term) while emphasizing continued pricing agility and cost discipline.

Air France KLM Financial Statement Overview

Summary

Profitability and operating cash flow have recovered and remain positive, but the balance sheet is a major constraint: very high leverage and a thin equity cushion (including negative equity in recent annual periods). Free cash flow is only modestly positive in the TTM and has been volatile, limiting financial flexibility.

Income Statement

72Positive

Balance Sheet

28Negative

Cash Flow

55Neutral

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	34.18B	31.70B	31.46B	30.02B	26.39B	14.31B
Gross Profit	5.63B	3.79B	6.03B	6.17B	7.97B	3.10B
EBITDA	5.30B	5.07B	4.40B	4.62B	3.59B	-379.00M
Net Income	1.12B	1.53B	317.00M	934.00M	728.00M	-3.27B
Balance Sheet
Total Assets	41.61B	39.43B	36.16B	34.49B	32.30B	30.68B
Cash, Cash Equivalents and Short-Term Investments	5.96B	6.04B	5.98B	7.38B	7.23B	6.80B
Total Debt	13.71B	22.16B	14.53B	13.53B	14.71B	16.24B
Total Liabilities	38.82B	38.35B	35.36B	33.99B	34.78B	34.50B
Stockholders Equity	651.00M	-982.58M	-1.76B	-2.05B	-3.00B	-3.82B
Cash Flow
Free Cash Flow	356.66M	110.46M	-232.00M	-426.00M	1.88B	-668.00M
Operating Cash Flow	4.43B	4.38B	3.50B	3.13B	4.86B	1.53B
Investing Cash Flow	-2.22B	-2.91B	-2.77B	-3.24B	-2.15B	-1.24B
Financing Cash Flow	-1.95B	-1.55B	-2.11B	-285.00M	-2.76B	-77.00M

Air France KLM Technical Analysis

Technical Analysis SentimentNegative

Last Price1.17

Price Trends

50DMA1.28Negative

100DMA1.36Negative

200DMA1.29Negative

Market Momentum

MACD-0.04Negative

RSI40.57Neutral

STOCH63.38Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFLYY, the sentiment is Negative. The current price of 1.17 is below the 20-day moving average (MA) of 1.19, below the 50-day MA of 1.28, and below the 200-day MA of 1.29, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 40.57 is Neutral, neither overbought nor oversold. The STOCH value of 63.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AFLYY.

Air France KLM Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

AFLYY against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LTM	81Outperform	$11.86B	7.65	98.01%	3.61%	20.16%	39.18%
RYAAY	75Outperform	$26.49B	12.80	20.27%	2.50%	13.24%	-1.27%
DAL	70Outperform	$52.73B	15.90	15.40%	1.00%	14.11%	-29.50%
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
UAL	63Neutral	$33.87B	9.54	21.81%	―	12.31%	9.08%
AFLYY	58Neutral	$3.04B	2.51	-542.96%	―	12.59%	15.99%
AAL	41Neutral	$8.35B	-17.26	12.03%	―	12.32%	-179.51%

* Industrials Sector Average

Performance Comparison

AFLYY and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
AFLYY	Air France KLM SA	1.16	-0.23	-16.68%
DAL	Delta Air Lines Inc.	80.15	22.27	38.47%
RYAAY	Ryanair	53.72	-10.45	-16.29%
UAL	United Airlines Holdings, Inc.	104.24	8.13	8.46%
AAL	American Airlines Group Inc	12.60	-0.74	-5.55%
LTM	LATAM Airlines Group SA Sponsored ADR	42.38	-1.90	-4.29%

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: Aug 03, 2026

Air France KLM AI Stock Analysis