Air France-KLM S.A.

Group revenue increased nearly 10% year over year to EUR 9.3 billion. Adjusted operating profit was EUR 484 million and the operating margin was 5.2%. Management said higher fuel prices lifted the quarter’s fuel bill by about EUR 900 million versus last year, but the company recaptured approximately 86% of that additional cost. For the first half, recurring adjusted operating free cash flow was EUR 928 million, and cash at hand was more than EUR 10 billion. Looking ahead, management still expects full-year fuel to be roughly USD 1.9 billion higher than in 2025, and reiterated full-year guidance for capacity growth of 2% to 3%, unit cost growth of 0% to 2%, capex below EUR 3 billion, and leverage between 1.5 and 2.

Benjamin Smith framed the quarter as strong operationally and commercially despite a volatile external backdrop, emphasizing premiumization, brand strength, and disciplined consolidation. He said demand remained robust across the network, especially in premium cabins and long-haul markets, and highlighted brand initiatives, lounge upgrades, loyalty wins, and fleet renewal as key strategic levers. He also stressed that Air France-KLM’s approach to consolidation is disciplined and pan-European, pointing to the planned SAS stake increase and the TAP bid as strategically important for network reach and synergies.

Steven Zaat said unit revenues were up 9%, driven by cargo, passenger revenue, and Transavia, while unit costs remained within the 0% to 2% guidance range. He highlighted better-than-expected fuel recapture, with roughly 1/3 of the Q2 benefit from lower fuel prices and the rest from revenue strength, and noted cargo unit revenue rose 26.7% in the segment view. On cash and balance sheet, he pointed to cash at hand of EUR 10.3 billion, reduced interest costs through refinancing and repayment of expensive bonds, and reaffirmed leverage discipline. He also said maintenance costs remain elevated because of spare-part shortages, but this is already assumed in the forecast and should be offset by fuel efficiency, fewer wet leases, and better operations later in the year.

Analysts pressed on whether premium yields can keep outpacing capacity growth, and Smith said the group is still starting from a relatively low base, with strong U.S. inbound demand and underpenetration of Premium Comfort at KLM supporting the trend. Questions on TAP focused on how the bid differs from Lufthansa’s and whether minority ownership limits control; management said Lisbon is strategically important for Brazil and South America, and that network, cargo, MRO, and commercial synergies are still achievable even before control. Analysts also asked about cargo, ETS costs, KLM’s path to its 8% margin target, and maintenance pressure; management said cargo is contributing roughly EUR 100 million more, ETS calculations are still being worked through, KLM is improving step by step, and maintenance costs should stay elevated but within guidance.