Air France-KLM (AF) Q4 2025 earnings summary

Executive summary

• Achieved record operating result of EUR 2.0 billion in 2025, up EUR 400 million year-over-year, with revenues reaching an all-time high of EUR 33 billion, up 4.9% year-over-year, reflecting disciplined execution and ongoing transformation initiatives.

• Carried over 100 million passengers, surpassing pre-COVID levels, with capacity up 4.9% and premiumization strategy driving top-tier cabins to 28.1% of revenue and premium cabins to over 36% of group revenue.

• Premiumization and brand enhancement initiatives led to strong revenue growth, especially in La Première, Business, and Premium Economy segments, and ancillary services.

• Sustainability initiatives advanced, with next-generation aircraft now 35% of fleet, SAF blending at 2.9%, and industry recognition for environmental leadership, though GHG intensity target for 2025 was not fully met.

• Strengthened market position via proposed increased stake in SAS, acquisition of a 2.3% stake in WestJet, and continued focus on North American and Asian connectivity.

Financial highlights

• Net income reached a record EUR 1.8 billion, including EUR 700 million from unrealized FX results; recurring adjusted operating free cash flow was EUR 1 billion, up EUR 800 million year-over-year.

• Operating margin improved by 1.0pt to 6.1%; net debt to EBITDA stable at 1.7x; equity increased by EUR 1.6 billion to EUR 2.4 billion, returning to pre-COVID levels.

• Ancillary revenue rose 23% to EUR 2.1 billion, with broad-based growth across seat selection and hand luggage.

• Cash at hand of EUR 9.4 billion, well above targeted liquidity, and successful bond issuances including €650m at 3.875% coupon.

• Q4 2025 revenues were €8.2bn (+3.9% YoY); operating result stable at €393m.

Outlook and guidance

• 2026 capacity growth guided at 3%-5%, with long-haul up 4%, short/medium-haul stable, and Transavia up 10%.

• Unit cost guidance for 2026 set at 0%-2% increase, with premiumization and higher ATC/airport costs factored in.

• Net capex for 2026 projected at ~€3bn, in line with prior year, focused on fleet renewal.

• Ambition to achieve operating margin above 8% by 2028, with continued focus on cost reduction, positive free cash flow, and investment grade leverage.

• Q1 2026 operating result to be impacted by ~€90m due to severe weather in Amsterdam and Paris.