Air France-KLM, biggest drop in SBF 120 mid-session on Tuesday, May 31, 2022 – May 31, 2022 at 12:10 PM

(AOF) –

Air France-KLM

(-4.01% to 1.56 euros)

The airline is being punished by the rise in oil. In addition, the stock is made volatile by the current capital increase.

AOF – MORE INFORMATION

Most important points:

– European number 1 in air transport, born in 2000 from the merger between Air France, founded in 1933, and the Dutch KLM, founded in 1019;

– Turnover of €14.3 billion realized 86% in passenger transport and freight, then maintenance for 7% and subsidiary Transivia for 7%;

– Business model based on optimizing fleet utilization, improving operational performance, simplifying structures and connectivity on the one hand, expanding the short- and medium-haul network and developing long-haul alliance flights (19 airlines alliance in SkyTeam ) and partnerships ;

– Capital owned 28.6% by the French state, 9.3% by the Dutch state, 8.8% by Delta Airlines, 8.8% by China Airlines and 3.7% by employees, Anne-Marie Couderc chairs the board of 19 directors, Benjamin Smith is CEO;

– Tight balance sheet with net debt of €8.2 billion, ie leverage of 11, but expected capital increase to €4 billion by the end of 2022.

Challenges

– Transformation strategy through organisation, cost reduction, fleet management and transfer to Transavia of the French domestic network excluding Marseille, Nice and Toulouse: debt ratio reduced to 3-3.5% in 2023, operating margin from 7 to 8% in 2024;

– Innovation strategy: at the service of the attentive relationship with the customer (massive use of voice-assistance techniques, artificial intelligence, blockchain and augmented reality), towards clean aviation, support for sustainable fuels, electric taxiing for ground towing, atmosphere monitoring…;

– Environmental strategy aimed at a 50% reduction in CO2 emissions (vs. 2005): Climate plan with 6 priorities including fleet modernization (€2.5 billion invested in aircraft that consume 25% less fuel), sustainable fuels based on SkyNRG, compensation plan with the CORSIA system / abatement of noise pollution, / 60% recycling of hazardous waste by 2020 and reduction, by 2030, of residual waste by half and commitment to biodiversity;

– Continued success of Transavia – expected return of seat occupancy above 2019 level.

Challenges

– No return to 2019 traffic levels before 2024-25 and uncertainties about the reopening of Chinese airports;

– Benefits of strengthening partnership, industrial and capitalist, with China Eastern;

– Resistance to the rise of competition in maintenance;

– Outlook for 2022, after the return to operating profitability in Q1: for Q2: capacity offered in seat kilometers for the networks at 80-85% vs 2019 and break-even operating profit / for Q3, capacity in seat -km from 85 to 90% and clearly positive operating result

– No dividend payment in 2021 (for the 7th consecutive year).

A future reduction in the number of journeys

According to a study by Roland Berger, personal and professional air travel could drop by 20% once the crises are over. This negative trend is the result of environmental concerns. l

Passengers should choose more environmentally friendly airlines

† This approach is an extension of the movement



fly ”



“the shame of flying”, born in Scandinavia shortly before the start of the pandemic. The development of virtual mobility will also drive the decline in travel, which will be greater for business travel (around 21% to 24%) than for personal travel (14% to 20%). According to the study, long distance will not return to 2019 levels until 2026.

Leave a Comment