Press release - Q1 2025 Results

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April 30, 2025

• Group revenues up 7.7% compared to last year at €7.2bn, driven by all businesses.

• Operating result stood at -€328m, an improvement of €161m compared to last year. Margin at -4.6%.

• Unit revenue at constant currency up +3.0% driven by Network, while group capacity went up by +3.8%.

• Unit cost up +2.1% compared to 2024, due to airport and air traffic control charges, capacity mix effect, premiumization, inflation but partly compensated by productivity. Last year unit cost was affected for 0.8% by an one-time payment to KLM staff.

• Positive Recurring adjusted operating free cash flow, at €783m.

• Leverage (Net debt/EBITDA ratio) at 1.6x in line with the Group’s ambition.

• Strong Cash at hand at €9.3bn while reducing the financial liabilities with €741m including a €515m bond redemption from our cash.
  
  

FY 2025 outlook unchanged despite uncertainty

For 2025 the Group expects:

• Capacity up by 4-5% compared to 2024.

• Unit cost to increase by a low single digit compared to 2024.

• Net capital expenditures between €3.2bn and €3.4bn.

• Leverage between 1.5x and 2.0x.

Commenting on the results, Mr. Benjamin Smith, Group CEO, said:

Air France-KLM delivered a solid start to 2025. Sustained demand supported a rise in revenue across all businesses and summer ticket sales allowed us to improve cash flow generation.

This quarter, we continued to deliver on our ambitious strategic roadmap, notably with the successful launch of Air France’s new La Première experience - a key milestone in the ongoing premiumization of our offer, and with the continued integration of latest generation aircraft across our airlines.

The increasingly uncertain context may bring additional headwinds going forward, yet we believe Air France-KLM is uniquely positioned to adapt and perform, thanks to its diversified network, its product and services that position us well. Together with our strong hubs and brands, these are essential assets.

Solid Group unit revenue performance

*IFRS Operating free cash flow corrected from the repayment of deferred social charges, pensions contributions and wage taxes granted during the Covid period and payment of lease debt and interests paid and received

Operating result improvement driven by strong unit revenue development and fuel price reduction

In the first quarter Air France-KLM welcomed 21.8 million passengers which is 4.5% above last year. As capacity increased by 3.8% and traffic by 3.3%, the load factor remained broadly stable at 86.0%.

The Group unit revenue per ASK was up +3.0% at constant currency compared to last year, driven by strong yield performance for passenger network and Cargo. The cargo load factor improved as well.

Passenger yields were very strong, especially on the North Atlantic, but also in Asia & Middle East, in Latin America and in the premium cabins. Cargo continues to benefit from traffic from Asia with unit revenues per ATK up +16.2% against a constant currency.

The operating result was €161 million above last year at -€328 million, with a margin ending at -4.6%. This performance is stemming from an increase of unit revenues (€181 million) of passenger network and Cargo and a decrease of fuel price & ETS unit costs (€190 million), partly offset by an increase of the unit costs at constant fuel price and currency (€136 million).

Q1 unit cost¹ was up 2.1% as a consequence of below elements:

• +1.1% related to unit revenue generation:

  • Capacity mix effect with larger growth on the Short and Medium Haul segment versus Long Haul, especially at KLM

  • Premiumization of the cabin including significant Premium Comfort growth at KLM

• +0.7% mainly due to Airport charges and Air Traffic Charges increase

• +0.3% cost linked to:

  • +2.3% labour price partly offset by -0.8% one-off payment to KLM staff in Q1 2024

  • -0.6% productivity

  • -0.6% mainly due to improved operations, reducing customer compensation and fuel efficiency despite higher maintenance cost KLM

Cash

For the first quarter, the Group reported a positive operating free cash flow of €1,009 million, 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. The net capex was at €896 million.

Recurring adjusted operating free cash flow which excludes deferrals and includes lease debt and net interest payment amounted to +€783 million, up €190 million compared to last year.

At end of March, the cash at hand stood at €9.3 billion, a decrease of €0.1 billion versus the end of 2024 mainly due to the redemption in January of the remaining €515.2 million principal amount of the €750 million 1.875% notes due 16 January 2025 (ISIN: FR0014477254). The redemption, via the Group’s own liquidity, underscores the robustness of its financial position.

The level of cash at hand remains high and above the targeted level of €6 billion to €8 billion.

Net debt decreased to €6.9 billion, down €0.4 billion primarily due to the positive operating free cash flow of €1.0 billion despite an increase in new and modified lease debt of almost €0.6 billion, largely driven by the fleet renewal and extension of current lease to cover delays in deliveries. The leverage ratio stood at 1.6x in line with the Group’s ambition of 1.5x to 2.0x.

FY 2025 outlook unchanged despite uncertainty

The Group expects

• Capacity in Available Seat Kilometers for Air France-KLM Group including Transavia to increase by 4 to 5% in 2025 compared to 2024

• Unit cost¹ to increase by a low single digit compared to 2024

• Capital expenditures: net capex expected between 3.2 and 3.4 billion euros

• Leverage ratio (net debt/EBITDA ratio) between 1.5x and 2.0x

Sustainability

Transition Plan and trajectory

Sustainability is a collective responsibility, and Air France-KLM is committed to play its role. The Group’s ambition is to reduce greenhouse gases (GHG) emissions and limit the increase in the global average temperature in line with the Paris Agreement. This ambition is fully aligned with the International Civil Aviation Organization’s (ICAO) long-term global aspirational goal of net-zero carbon emissions by 2050. To achieve this ambition, the Group has worked out a Transition Plan for climate mitigation and adaptation. To monitor the progress towards the achievement of this plan, the Group has set the ambition of reducing its GHG emissions per RTK (revenue ton-kilometer) by 30% in 2030 compared to 2019 (scope 1 + scope 3 category 3).

Air France-KLM and its airlines faced some headwinds to its GHG intensity progression including delays in fleet renewal plan due to constraints in the supply chain; engine issues with part of its new generation aircraft fleet (such as several Airbus A220s) not allowing the Group to operate them to their maximum capacity; higher fuel consumption due to longer flight time on certain routes caused by different geopolitical circumstances. These headwinds are faced by several actors in the airline industry.

Fleet Renewal

In line with its fleet renewal strategy, Air France-KLM continues to take delivery of new generation aircraft such as:

■ Airbus A350s which consume 25% less fuel per passenger km and are 40% quieter than the previous generation aircraft;

■ Airbus A320neo family aircraft, which consume 15% less fuel per passenger km and are 50% quieter than the previous generation aircraft;

■ Airbus A220s which consume 20% less fuel per passenger km and are 34% quieter than the previous generation aircraft;

■ Embraer 195-E2s which consume 31% less fuel per passenger km and are 63% quieter compared to the E-190 that they replace;³

At the end of March 2025, the Group had 28% of its fleet composed of new generation aircraft, contributing to a fuel efficiency gain of 0.3% on the total unit cost.

The Group plans to get up to 80% of its fleet with new generation aircraft by 2030.

In the first quarter new generation aircraft have been phased in while the old generation aircraft have been phased out:

Air France returned to the lessor one Airbus A380 which was operationally phased out in 2020.

These tables are based on the column “ Total” in Group fleet table in the appendix.

Business review

Network result

Compared to the first quarter of 2024, total revenues increased by +6.7% to €6,042 million. The operating result stood at -€193 million which was €215 million above last year against a constant currency and was the consequence of a fuel price reduction and higher revenues despite Easter shift and Ramadan. Enhanced operations resulting in lower disruption costs also contributed to the improved operating result.

Overall the operating margin was at -3.2%, up 3.1 point compared to 2024.

Improved performance for the Passenger network activity

During the first quarter of 2025, capacity in Available Seat Kilometers (ASK) was 2.5% higher than last year. Traffic growth (+2.3%) has led to a broadly stable load factor at 85.9%. Yield corrected for currency showed a strong performance with an increase of 3% while load factor reduced -0.2 points resulting in a unit revenue increase of +2.8% against a constant currency compared to last year.

During the first quarter we observed the following trends per region:

North Atlantic

Q1 unit revenue increased by +11% and flat capacity mainly due to high yield with favorable market dynamics, with strong performance especially on the US routes driven by the point-of-sale US.

Latin America

Unit revenue grew in sync with capacity by +3% on the back of strong yield (4.5%), while load factor remained broadly stable at 90%.

Asia & Middle East

Growth was mainly supported by Asia while Middle East performance was softer primarily due to the cancellation of the Abu Dhabi route. Unit revenue in the region was up 6.4%, supported by strong yield development (+6%) while load factor remained stable at 87%. Air France-KLM benefited from the reopening of routes to Tel Aviv and Beirut.

Caribbean & Indian Ocean

A strong capacity increase by the industry (Air France-KLM: +7%) combined with weak demand drove a lower fare environment and resulted in a decrease in unit revenue by -6%.

Africa
Capacity rose by 2%, but unit revenue decreased by 1%, primarily reflecting a 2-point drop in load factor to 83%, driven by the impact of Ramadan, Easter shift and calendar timing effects.

Short and Medium haul

The contrasted environment as short haul continued to reduce capacity and medium-haul segment increased its capacity by 9%.

Overall, capacity increased by 8.0%, with a broadly stable load factor at 82% and a 2.7% decline in yield. Weaker year-on-year performance reflects an unfavorable supply-demand environment, compounded by the calendar shift of Ramadan and Easter, and reduced connecting traffic.

Cargo: Continuation of strong unit revenue performance

During the first quarter of 2025, capacity in Available Ton Kilometers (ATK) was +0.3% higher than last year. Full freighter capacity was negatively impacted by longer-than-expected maintenance. Supported by a strong market, traffic growth (+4.5%) was above the capacity growth and has led to an increase of 2 points of load factor reaching 49.0%. Together with an 11.4% increase in yield, unit revenue per ATK increased by 16.2% at constant currency, although last year first quarter results were negatively impacted by the implementation of a Cargo IT system for Air France.

Transavia: Challenging quarter

Transavia’s capacity in available seat kilometers increased by 13.6%, while traffic increased by 10.7%, resulting in a reduction in load factor of 2 points. Unit revenue remained stable, up +0.1%, supported by positive yield development following the introduction of paid hand luggage in the second quarter of 2024. However, performance was affected by geopolitical instability and bad weather in Spain. In the Netherlands, Transavia also faced headwinds from the increase in ticket tax, which led some passengers to opt for departures from Germany and Belgium instead. A higher seasonality due to a strong capacity development impacted the operating result. As a consequence, the operating result decreased by -€40 million compared to last year.

Maintenance business: Operating result and margin improvement

The maintenance segment continued its strong growth of third-party revenues in the first quarter 2025 by a double digit increase of +11.5%, especially showing a strong recovery on the engine side, while total revenues rose by 15.4%. The operating result increased by €36 million and the operating margin stood at 4.6%, which is 2.3 point higher than in 2024.

Air France’s Q1 performance supported by a dynamic pricing environment and lower fuel price

Air France Group

In the first quarter, operating result stood at -€183 million which was €66 million above last year, mainly driven by a strong unit revenue performance (+2.2% compared to Q1 2024) due to sustained premium demand and high yield while the fuel price decreased. Air France Group posted an operating margin at -4.2%, 2 points up compared to 2024 despite the shift of Easter and the increase of the solidarity tax on flight tickets (TSBA) as per March 1^st, 2025, whose impact on the operating result has been estimated between €90 million and €170 million for 2025.

KLM: Operating margin improvement thanks to good unit revenue performance

KLM Group

First quarter revenues grew by 7.7% driven by high yield for passenger network and Cargo. Cost increases are explained by CLA related increase of salary cost, component business maintenance cost and other operating expenses, including Premium Comfort seats ramp up and capacity haul mix while fuel cost decreased. The operating margin increased by 3.9 points to -6.7%.

Back on Track delivered according to plan in the first quarter with main contribution coming from various revenue improving initiatives and Maintenance. The latter contributed both on the third party revenue side as well as by reducing the non-performance cost at KLM. Productivity delivery, partly dependent on outcome of ongoing CLA discussion, from the second quarter onwards while Schiphol tariff increase per April 1st and maintenance cost remains high.

Stable performance for Flying Blue Miles

Flying Blue Miles

In the first quarter Flying Blue Miles generated €199 millions of total revenue, including third party airline and non-airline partners. The operating margin stood at 23.1%.

Overall Flying Blue delivered a stable performance despite less access for the members due to strong unit revenue development.

In March 2025 Air France-KLM and American Express extended their global partnership until September 2033.

Nb: Sum of individual airline and Flying Blue results does not add up to AF-KLM total due to intercompany eliminations at Group level.

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The results presentation is available at www.airfranceklm.com on April 30, 2025 from 8:00 am CET.

A conference call hosted by Mr. Smith (CEO) and Mr. Zaat (CFO) will be held on April 30, 2025 at 09.30 am CET.

To connect to the webcast, please use below link:

https://channel.royalcast.com/landingpage/airfranceklm/20250430_1/

Income statement

Note: the sum of “Salaries and related costs” in the business review section is not equal to the above mentioned figure due to corporate overhead, IT and other businesses not directly related to Network, Maintenance or Transavia

Consolidated balance sheet

Statement of Consolidated Cash Flows from January 1 until March 31, 2025

Net debt

Recurring adjusted operating free cash flow

^{(1) Exceptional payments made/(received), restated from operating free cash flow for the calculation of recurring operating free cash flow adjusted, correspond to the repayment of deferred social charges, pensions contributions and wage taxes granted during the Covid period.}

Return on capital employed (ROCE)

^{(1) Compared with previous periods, working capital has been restated to exclude the deferral of social and fiscal charges granted following the Covid.}

^{(2) Excluding the report of social & fiscal charges granted consequently to Covid.}

Unit cost: net cost per ASK

Unit cost per ASK excluding fuel and ETS vs Q1 2024: +3.5%
Definition: Unit cost = (total operating expenses - fuel - carbon emission - total other revenues) / Group Capacity in ASK

Group fleet at 31 March 2025

2025 TRAFFIC

Passenger network activity

Transavia activity

Total Group passenger activity

Cargo activity

Air France activity

KLM activity

1 At constant fuel, constant currency and excluding ETS
2New generation fleet / Fleet in operation
3 The calculations are made based on information made available by aircraft producers. Decreases may vary depending on the specific aircraft it replaces
4 Excluding Transavia

Attachment

• Q1 2025 - AFKLM - Press release vdef