Air France-KLM (AF) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue increased by 6.2% year-over-year to €8.4 billion, with operating income up €223 million to €736 million and an operating margin of 8.7%, driven by premiumization and strong demand in premium cabins.

• Net income for Q2 2025 reached €649 million, up €484 million year-over-year, and H1 2025 net income rebounded to €401 million from a €314 million loss in H1 2024.

• Strategic initiatives included expanding the Flying Blue loyalty program, advancing group-wide synergies, and progressing on the planned majority stake in SAS, targeting 60.5% ownership by H2 2026.

• New partnerships and alliances were formed in MRO and with airlines such as Saudia, AerCap, Riyadh Air, Qantas, and IndiGo.

• Fleet renewal advanced, with 30% of the fleet now next-generation aircraft, supporting sustainability goals.

Financial highlights

• Adjusted operating free cash flow reached €0.7 billion for H1 2025, with recurring adjusted operating free cash flow up nearly €0.6 billion year-over-year.

• Net debt reduced to €7.1 billion at June 2025, supported by strong free cash flow and a leverage ratio of 1.5x.

• Cash at hand stood at €9.4 billion at the end of June 2025.

• Operating margin improved by 2.3 points year-over-year to 8.7% in Q2 2025.

• H1 2025 revenues totaled €15.6 billion (+6.9% year-over-year), with operating margin at 2.6% and EBITDA at €1,866 million.

Outlook and guidance

• 2025 outlook confirmed with balanced growth, investment, and financial discipline; capacity guidance for 2025 remains at 4-5%, with Transavia expected to exceed 10%.

• Unit cost increase guided at low single digits (1%-2%) for H2 2025; net capex guidance maintained at €3.2–€3.4 billion, mainly for aircraft deliveries.

• Net debt/EBITDA target remains between 1.5x and 2x for FY 2025.

• 2026–2028 targets reaffirmed: operating margin above 8%, EBIT to improve by ~€2 billion by 2028, and significant leverage reduction.

• No additional tax expense expected from OECD Pillar 2 for 2025; effective tax rate to remain stable.