Air France-KLM has reported a robust performance for the second quarter of 2025, showing resilience in a challenging global aviation landscape. The airline group announced revenues of €8.4bn, marking a 6.2pc increase year-on-year, driven by strong demand in premium cabins and strategic operational enhancements. The operating result reached €736m, with an operating margin of 8.7pc, reflecting significant improvement from the previous year. This financial upturn was underpinned by a 6pc rise in passenger numbers, totalling 27.3m, and a focus on premiumisation, with premium cabin revenues surging by 11pc.
The group’s network segment, encompassing Air France and KLM’s passenger operations, delivered a solid €666m operating result with a 10.5pc margin, while the maintenance division contributed €70m at a 12.5pc margin. Transavia, the low-cost carrier, faced headwinds, particularly from geopolitical tensions impacting Middle East routes, resulting in a modest €12m operating result and a 1.3pc margin. Despite these challenges, the group’s Flying Blue loyalty programme shone, generating €226m in revenue with an impressive 26.5pc operating margin, bolstered by strong third-party partnerships.
Air France-KLM’s financial health was further strengthened by a leverage ratio improvement to 1.5x from 1.7x at the end of 2024, supported by a €9.4bn cash reserve. The group successfully issued a €500m hybrid bond in May, aiding balance sheet simplification, and fully redeemed €500m in perpetual bonds in July. However, rising unit costs, up 4.0pc from Q2 2024, driven by labour, air traffic control, and airport charges, posed challenges. KLM’s “Back on Track” programme is expected to deliver €450m in cost savings for 2025, mitigating these pressures.
The market responded positively, with Air France-KLM’s stock rising 4.
44pc following the results announcement, reflecting investor confidence in the group’s strategic direction. The stock closed at €11.16 on 30 July, within a 52-week range of €6.70 to €12.09. Despite missing the company-provided consensus revenue forecast of €8.52bn, the results underscored operational resilience. CEO Benjamin Smith highlighted the group’s disciplined strategy and fleet modernisation, with 30pc of the fleet now comprising next-generation aircraft. CFO Steven Zaat emphasized agility in capacity management and financial stability.
Looking ahead, Air France-KLM reaffirmed its 2025 outlook, projecting 4-5pc capacity growth and a leverage ratio between 1.5x and 2.0x. However, sustainability targets face challenges due to supply chain delays and geopolitical factors affecting flight routes, potentially impacting 2025 emission goals. The group’s planned acquisition of a majority stake in SAS, increasing its ownership from 19.9pc to 60.5pc, aims to bolster its Northern European presence, pending regulatory approval.
The results highlight group’s ability to navigate industry challenges, including a new solidarity tax on flight tickets expected to dent 2025 results by €90-170m. Despite these hurdles, Air France-KLM’s focus on premium offerings, strategic partnerships, and operational efficiency positions it well for sustained growth. The market’s positive reaction reflects optimism about the group’s ability to balance cost pressures with revenue growth in a complex global environment.
