SECOND QUARTER 2025

Continued Q2 operating result improvement to €736 million and strong margin expansion at 8.7%

• Group revenues up 6.2% year-on-year to €8.4bn, driven by all businesses.  
• Operating result stood at €736m, an improvement of €223m year-on-year (including an Olympic games year-on-year impact of €40m) with a margin of 8.7%.
• Unit revenue at constant currency up 2.4% driven by Network and Transavia, while group capacity went up by 4.2% and fuel price after hedging decreased by 11%.
• Unit cost up 2.7% year-on-year as expected, due to air traffic control and airport charges (Schiphol tariff +41%), maintenance related cost (including a positive one-off last year), premiumization and inflation partly compensated by productivity gains.
• H1 recurring adjusted operating free cash flow positive at €0.7bn, up nearly €0.6bn year-on-year.
• Leverage (Net debt/Current EBITDA ratio) at 1.5x.  
• Solid cash at hand of €9.4bn at end June 2025.   
• Further progress in fleet renewal with 30% share of next generation aircraft, up 7 points year-on-year.

FY 2025 outlook reconfirmed  

For 2025 the Group retains an agile approach given the current uncertainty and 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 second quarter, with revenue growth and improved margins, reflecting the strength of our diversified network and the disciplined execution of our strategy. We are advancing premiumization, pushing the boundaries of aspirational travel with enhanced products and services, while progressing on the renewal of our fleet with nextgeneration aircraft, in line with our sustainability efforts. At the same time, we are reinforcing global connectivity through key partnerships and joint ventures in strategic areas, and, in early July, we initiated proceedings to take a majority stake in SAS. This marks a major step to strengthen our position in Northern Europe and expand our network reach. Although the external environment remains complex, Air France-KLM continues to demonstrate its resilience and is well positioned to achieve its targets. I want to thank all our teams for their continued commitment — their dedication is what makes this performance possible.”

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 unit revenue development and fuel price evolution

In the second quarter of 2025, Air France-KLM welcomed 27.3 million passengers which is 5.9% above last year. As capacity and traffic increased by 4.2%, the load factor remained stable at 87.8%.    

The Group unit revenue per ASK was up 2.4% year-on-year at constant currency, driven by strong

yield             performance            in           Network             (passenger            and           cargo)           and                         Transavia.  

Passenger yields were strong on the North Atlantic, despite the tariff turbulence, while also increasing in Asia & Middle East, Latin America and led by the premium cabins. Cargo continued to benefit from traffic out of Asia with unit revenues per ATK up 2.6% at constant currency.

The operating result rose €223 million year-on-year to €736 million, with a margin of 8.7%. This performance was driven by a €176 million increase in unit revenues across the passenger network, Cargo and Transavia while unit costs including fuel remained broadly stable.   

Q2 unit cost^[1] was up 2.7% as a consequence of the below elements:

• +0.3% related to unit revenue generation:

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

(+0.7%)  

• +1.1% mainly due to Air Traffic Charges and Airport Charges increase, especially due to the 41% tariff increase at Schiphol
• +1.3% cost representing the net result of:  

           ◦             +1.4% from labour price driven by salary increases

           ◦           -1.0% from productivity benefits

◦ +0.9% mainly from higher maintenance cost at KLM (including a positive one-off last year) and increased customer compensation (related to the grounding of seven B787 at KLM in May and to Transavia France)

Cash  

In the second quarter Air France/Air France-KLM and KLM extended both their Revolving Credit Facilities (RCF) until 2029. The total amount of the Group RCFs is maintained at €2.4 billion, and these facilities are currently undrawn. Through this transaction, Air France-KLM, Air France and KLM are extending the average maturity of available resources, in line with the Group’s policy of careful liquidity management.

For the first half of the year, the Group reported a positive operating free cash flow of €1,285 million, supported mainly by a favorable working capital from ticket sales, although impacted by the deferrals inherited from the pandemic which amounted to €244 million. Net capex amounted to €1.742 million. Recurring adjusted operating free cash flow^[2] reached €723 million, an increase of €589 million year-on-year.

The operating free cash flow stood at €1.3 billion, partly offset by almost €1.2 billion in new and modified lease debt driven by fleet renewal and extension of current leases to cover delivery delays. As a consequence net debt decreased to €7.1 billion, down €197 million.

The leverage ratio stood at 1.5x in line with the Group’s ambition of 1.5x to 2.0x.  

The level of cash at hand remains high and above the targeted level of €6 billion to €8 billion. At the end of June, the cash at hand stood at €9.4 billion, stable versus the end of 2024.  

During the first half year of 2025, the following transactions took place:

• 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 successfully priced issuance in May of €500 million hybrid bonds (3.5x oversubscribed), at an annual fixed coupon of 5.75% (yield at 5.875%) until the first reset date. The Hybrid Bonds, undated and deeply subordinated, were rated BB by Fitch and B+ by S&P and do qualify for 50% equity credit with both rating agencies.  

The net proceeds of the issue of the Hybrid Bonds is used by the Company for refinancing of existing subordinated instruments within the Group. This issue enables the Group to simplify its balance sheet and optimize its cost of financing while maintaining financial flexibility. The Group’s strategy is to reduce the stock of subordinated instruments on its balance sheet.

In July (after the Q2 closing) Air France-KLM fully redeemed the perpetual bonds issued in July

2022 for an amount of €500 million. These bonds were issued by an operating affiliate of Air France, that owns a pool of spare engines dedicated to the airline’s Engineering and Maintenance activities and was fully subscribed by Apollo affiliated entities.

The transaction three years ago supported Air France-KLM in its trajectory to come back to a positive equity position under IFRS and the Group thanks Apollo for the smooth partnership during this trajectory.

Rating update

• Fitch affirmed Air France-KLM’s rating at ‘BBB-’
• S&P affirmed at the 14th of July Air France-KLM’s ‘BB+’ rating while maintaining the stable outlook.

FY 2025 outlook reconfirmed

For 2025 the Group retains an agile approach given the current uncertainty and 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 cost^[3] to increase by a low single digit compared to 2024.
• Net capital expenditures between 3.2 and 3.4 billion euros.
• Leverage ratio (net debt/Current EBITDA ratio) between 1.5x and 2.0x.

Sustainability  

Sustainability is a collective responsibility, and Air France- KLM is committed to play its role. The Group supports the adoption of ambitious environmental targets, advocating for an industry- wide transformation that ensures a global level playing field.  

Fleet Renewal

In line with its fleet renewal strategy, Air France-KLM continues to take delivery of new generation aircraft such as Airbus A350s, B787-10, A320neo family aircraft, A220s, Embraer 195-E2s. These new generation aircraft consume up to 25% less fuel per passenger km and reduce the noise footprint by up to 63% compared to the previous generation aircraft they replace.

At the end of June 2025, the Group had 30% of its fleet composed of new generation aircraft.

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

SAF  

The Air France-KLM Group is working on increasing SAF demand and usage, driving its growth and development worldwide.

On April 23, 2025, the Carb Aéro call for projects award ceremony was held at Air France’s headquarters at Paris-Charles de Gaulle. This initiative, part of the France 2030 investment program, aims to support the emergence of an e-SAF (synthetic drop-in fuel substitute to conventional fossil-based jet fuel) sector — a key technology in achieving the decarbonization goals of the aviation industry. As an airline group fully committed to decarbonizing its industry, Air France-KLM proudly hosted this event and reaffirmed its support for the development of an industrial ecosystem for sustainable fuel production in France — contributing to the country’s energy sovereignty and competitiveness.

In June 2025, on the occasion of the Paris Air Show, Air France signed the SAF component of the New Energy Systems sector contract with the French government and industry partners. In the presence of Mr. Eric Lombard (Minister of Economy, Finance and Industrial and Digital Sovereignty), Mr. Marc Ferracci (Minister for Industry and Energy), Mr. Philippe Tabarot (Minister for Transport) and Nathalie Delattre (Minister for Tourism), four main objectives were identified:

• Set national SAF production and consumption targets for 2030 and beyond;
• Develop competitive financing models at French and European levels;
• Support the industrialization of SAF projects and ensure their profitability;
• Launch the first advanced bio-SAF and e-SAF production projects before 2030.  

In parallel, the Air France-KLM Group also signed an agreement with Airbus, enabling the aircraft manufacturer’s employees to reduce the carbon footprint of their business travel by supporting SAF production. This voluntary commitment is part of the Air France-KLM “Corporate SAF” program and aims to develop a transparent, traceable, and verifiable SAF offering.

GHG emissions per RTK (revenue ton-kilometer)

At the end of June 2025, the indicator was 924 gCO₂eq/RTK^[6], which represents a 1.5% reduction compared to end of June 2024.  

Air France-KLM and its airlines are facing some headwinds to their GHG intensity reduction due to unforeseen and external events beyond the Group’s control, including delays in executing the fleet renewal plan due to constraints in the supply chain; engine issues with part of its new generation aircraft fleet (such as several Airbus A220’s) 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.

Given above headwinds it is unlikely that the 2025 target of the Sustainability Linked Bond will be reached.

Post quarter events 

Air France-KLM to initiate proceedings to take a majority stake in SAS

On the 4th of July 2025, Air France-KLM announced that it will initiate proceedings to take a majority stake in SAS. The Group currently holds a 19.9% stake in the Scandinavian carrier and since the summer of 2024, it has implemented a commercial cooperation between SAS, Air France and KLM in the form of extended code-share and interline agreements, further strengthened by SAS joining the SkyTeam alliance.    

Provided all the necessary conditions are met, Air France-KLM would fully acquire the stakes held by Castlelake and Lind Invest, bringing its own stake to 60.5%. The Danish State would retain its 26.4% stake in SAS and its seats on the Board of Directors.  

The value of Air France-KLM’s contemplated investment in SAS would be determined at closing, based on SAS’s latest financial performance – including EBITDA and Net Debt. This transaction would be in line with the Group’s medium-term financial outlook.  

Business review 

Network result  

Compared to the second quarter of 2024, total revenues increased by +4.6% to €6,937 million. The operating result reached €666 million up €190 million year-on-year at constant currency driven by higher revenues and fuel price reduction.  

The operating margin improved to 9.6%, an increase of 2.9 point compared to 2024.  

Passenger network delivers solid Q2 performance with Premium cabin strength and yield gains

During the second quarter of 2025, capacity in Available Seat Kilometers (ASK) was 2.8% higher than last year. Traffic growth of +2.9% has led to a stable load factor at 87.4%. Yield at constant currency showed strong performance, up 2.8%, leading to a unit revenue of 2.8% year-on-year at constant currency.

During the second quarter we observed the following trends in:   

North Atlantic

Despite a 5% capacity growth, unit revenue increased by 5% driven by positive front cabin yield development while Economy cabin yield declined year-on-year. June performance was affected by the Middle East conflict.  

Latin America

Unit revenue grew on the back of strong yield (+6.1%), while load factor was slightly up at 91% and capacity increased by 5.6%.

Asia & Middle East

Growth was mainly supported by Asia while Middle East capacity was impacted by geopolitical tensions. Strong performance on Japan, Korea & South-East Asia. Unit revenue in the region was up 6%, supported by strong yield development while load factor remained stable at 89%.  

Caribbean & Indian Ocean

A strong industry wide capacity increase (Air France-KLM: +5%) led to a more competitive fare environment and 2% decline in unit revenue.  

Africa

Capacity, load factor and yield remained broadly stable year-on-year.

Short and Medium-haul

Overall, capacity rose 5%, with a broadly stable load factor at 85% and yield remaining flat. The focus was on stimulating local traffic and volumes to support additional capacity.

In the first half of the year, revenue from the premium segment grew by 11% year-on-year, increasing its contribution to passenger network revenue to 28.7%, up from 27.3% in the same period last year. This positive trend was observed across all regions.  The introduction of the new La Première cabin, which further strengthened the premium offering, generated great exposure. On the Transatlantic network, the premium revenue share remained broadly stable, above 41%.

Premium and Premium Comfort continued its strong momentum with a 27% year-on-year increase, bringing its share in the passenger network revenue to 8.1%, compared to 6.7% in the first half year of 2024.  

Cargo: robust performance

During the second quarter of 2025, capacity in Available Ton Kilometers (ATK) rose 1.4% year-onyear. Full freighter capacity was negatively impacted by longer-than-expected maintenance.

Traffic grew 1.1% slightly below capacity growth keeping the load factor broadly stable at 45.5%. Together with a 3% increase in yield, unit revenue per ATK increased by 2.6% at constant currency. In June, KLM completed the cutover from the old IT systems to the new system which was already done last year by Air France.

During the WACA (World Air Cargo Awards) 2025, Air France-KLM Cargo was declared Best European Airline. The award won by Air France-KLM Cargo is a recognition for airlines that have demonstrated outstanding performance and consistently provide excellent service, show leadership, and contribute to the development of the air cargo sector, globally or in their region.  

Transavia: Revenue growth and yield improvement support Q2 results amid cost pressures

Transavia’s capacity in available seat kilometers grew 11.4%, while traffic increased by 11.2%, resulting in a broadly stable load factor. Unit revenue was up +2.9%, supported by positive yield development at both Transavia France and the Netherlands. However, Transavia Netherlands faced increased competition, partly due to redirected capacity from Middle East towards other European destinations, putting the unit revenues under pressure. Also the increase in Schiphol tariffs in combination with the increase of the ticket tax last year which is resulting in higher ticket prices was pushing travelers to airports in Germany. In France performance was affected by a strike that led to significant customer compensations. Overall, unit cost increased by 4.9% despite lower fuel prices, mainly due to an increase in wet leases activity for Transavia the Netherlands.

Maintenance business: double digit growth and improved operating margin sssss

The maintenance segment continued its strong growth in Q2 2025 with third-party revenues up 19.3%, driven by a strong recovery on the engine activities. The total revenues rose 14.6%. The operating result increased by €33 million and the operating margin improved to 5.1%, up 2.0 point from 2024.  

On June 17^th, AFI KLM E&M, the MRO branch of Air France-KLM, and AerCap have announced that they have entered into exclusive negotiations to form a LEAP engine leasing joint venture. The parties intend to jointly own and manage a fleet of CFMI LEAP-1A and LEAP-1B engines enabling uninterrupted Airbus A320neo and Boeing 737 MAX fleet operations, while engines are going for a quick-turn or performance restoration shop visit within the AFI KLM E&M MRO network. The formation of this joint venture, which is subject to any necessary approval, will strengthen Air France KLM positioning on the MRO market by leveraging combined and complementary expertise in engine leasing, asset management and MRO services providing comprehensive MRO support to its customers all over the world.

Through the second quarter 2025, AFI KLM E&M also finalized and announced numerous major long-term MRO contracts including:  

• a 13-years agreement with Saudia Group for the maintenance of its GE90 engines powering Saudia’s Boeing 777 fleet,  
• an agreement with Salam Air for Leap 1A quick-turn maintenance,  
• a 3-years agreement with Kuwait Airways for its Auxiliary Power Units installed on its Boeing 777 fleet,
• an extension of the current engine maintenance support to Air Austral long-haul 777 aircraft.   

With these new contracts, Air France KLM MRO activity reinforces even further its market positioning and grows its order book on key strategic segments.

Air France’s Q2 operating result improved significantly on unit revenue growth

Air France Group

In the second quarter, the operating result reached €490 million, up €295 million year-on-year. This performance was mainly driven by strong unit revenue growth (+3.4% year-on-year), reflecting the absence of last year’s €40m Olympic Games impact, sustained premium demand and high yield alongside lower fuel prices. Air France Group achieved an operating margin of 9.5%, up 5.4 points from 2024, despite the increase in the solidarity tax on flight tickets (TSBA), effective March 1, 2025, which is expected to impact the 2025 operating result by €90-170 million.  

KLM: Operating margin under pressure due to cost headwinds

KLM Group

Second quarter revenues grew 4.0%, in line with capacity growth. Yields improved for passenger network, Cargo and Transavia, while load factors decreased for all three businesses.  

The change in operating result reflects the impact of the NATO summit in June and last years’ positive maintenance-related one-off. Further improvement was constrained by higher Schiphol tariffs, the grounding of seven 787 aircraft in May, and last year’s CLA increase, mitigated by the delivery of Back on Track initiatives.

The Back on Track program delivered €185 million in the first half of the year, as planned, with main contributions coming from various cost and revenue-improving initiatives and Maintenance. The latter supported performance by increasing third-party revenues and reducing non-performance cost at KLM. Productivity gains began in the second quarter from ground staff and cabin crew, though further acceleration depends partly on the outcome of ongoing CLA discussions. Meanwhile, Schiphol tariffs increased as of April and maintenance costs remain elevated.  Despite headwinds like the delayed implementation of the CLA, the Back on track target of €450 million remains unchanged.  

Flying Blue delivers solid growth and robust margin in Q2 

Flying Blue Miles

In the second quarter Flying Blue Miles generated €226 million total revenue, including revenues from third party airline and non-airline partners. The operating margin reached 26.5%.  

Overall Flying Blue delivered a strong performance in the second quarter thanks to:  

• Strong non airline partner Mile revenue growth,
• Development of young partnerships (Uber, Revolut) and focus on new ones,
• Back to normal seat availability for mileage redemption in April and May, while June showed less availability compared to last year (result of Olympic Games).  

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

******

The external auditors carried out limited review procedures. Their limited review report was issued following the Board meeting. 

The results presentation is available at www.airfranceklm.com on July 31, 2025 from 8:00 am CET.

Air France-KLM Press Office

+33 1 41 56 56 00 [email protected]

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 June 30, 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)

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 Q2 2024: +4.0%  and vs H1 2024: +3.7%

Definition: Unit cost = (total operating expenses – fuel – carbon emission – total other revenues) / Group Capacity in ASK

Group fleet at 30 June 2025

2025 TRAFFIC

Passenger network activity

Transavia activity

Total Group passenger activity

Cargo activity

Air France activity

               Long-haul                                                                                                                                                                                               

                  Passengers carried (‘000s)                          4,225           4,142          +2.0%          8,203                            8,023                                      +2.2%

                   Revenue pax-kilometers (m RPK)                30,943         30,011         +3.1%         60,203                                58,389                                +3.1%

                   Available seat-kilometers (m ASK)               35,403         34,285         +3.3%         69,139                                67,039                               +3.1%

               Load factor (%)                                         87.4%          87.5%          -0.1pt          87.1%                   87.1%                                              -0.0pt

                  Short and Medium-haul                                                                                                                                                                            

                  Passengers carried (‘000s)                          6,658          6,496          +2.5%         12,232                           11,809                                     +3.6%

                   Revenue pax-kilometers (m RPK)                5,881           5,707          +3.0%         10,625                                10,153                                +4.6%

                   Available seat-kilometers (m ASK)               6,993           6,867          +1.8%         12,886                                12,205                               +5.6%

               Load factor (%)                                         84.1%          83.1%         +1.0pt          82.5%                   83.2%                                              -0.7pt

KLM activity

               Long-haul                                                                                                                                                                                               

                  Passengers carried (‘000s)                          2,461           2,451          +0.4%          4,786                            4,787                                      -0.0%

                   Revenue pax-kilometers (m RPK)                19,183         18,961         +1.2%         37,278                                37,248                                +0.1%

                   Available seat-kilometers (m ASK)               21,577         21,325         +1.2%         42,359                                42,276                               +0.2%

               Load factor (%)                                         88.9%          88.9%          -0.0pt          88.0%                   88.1%                                              -0.1pt

                  Short and Medium-haul                                                                                                                                                                               

Passengers carried (‘000s) 6,408 6,008 +6.7% 11,768 11,144 +5.6% Revenue pax-kilometers (m RPK) 5,614 5,206 +7.8% 10,161 9,447 +7.6%

                   Available seat-kilometers (m ASK)               6,538           6,083          +7.5%         12,037                                11,318                               +6.3%

               Load factor (%)                                         85.9%          85.6%         +0.3pt          84.4%                   83.5%                                              +0.9pt

Source: Air France-KLM