Air France - Klm (adr) Stock Earnings Reports

Air France-KLM reported a resilient Q3 2025 with revenues up 3% YoY to EUR 9.2bn, passenger traffic +5% (29.2m pax) and a stable operating margin of 13.1%. Passenger network unit revenue was broadly stable (+0.5% at constant currency) with premium cabins outperforming lower-yield economy. Unit cost increase was limited (c. +1.3%); including fuel benefits unit costs were essentially flat. Operating income rose EUR 23m to EUR 1.2bn. Balance sheet and liquidity are strong: leverage 1.6x, cash ~EUR 9.5bn, and recurring adjusted operating free cash flow YTD around EUR 700m. Fleet renewal continues (new-gen aircraft ≈ 1/3 of fleet) and premiumization initiatives (cabin upgrades, Starlink Wi-Fi rollout, lounge and catering upgrades) are being expanded to lift revenue quality. Maintenance (MRO) grew revenues and margin, with a EUR 10.4bn order book. Headwinds in the quarter included U.S. immigration-related weaker low-yield long-haul demand, warm European summer impacting short-haul/Transavia, ATC and ground strikes, and higher airport/security/TSBA/Schiphol charges. Cargo unit revenues declined (notably due to freighter maintenance and normalization after a strong prior-year Q4). Guidance: FY capacity +4–5% (group), unit cost expected to be low single-digit increase (with Q4 improving), net CapEx EUR 3.2–3.4bn, and leverage target maintained. Management reiterated focus on productivity ('back on track') to offset external cost headwinds and indicated priorities for deleveraging hybrids and continued liquidity strength.