Air France’s new La Premiere cabin is displayed in Paris, France, March 18, 2025. REUTERS
LONDON, Feb 19 (Reuters) – Air France-KLM reported stronger-than-expected full-year results and a record operating profit on Thursday, as its strategy of offering a premium customer experience bore fruit despite ongoing cost challenges.
European airlines have seen a rise in demand for premium services, despite a drop in the number of Europeans travelling to the United States last year. Outlooks for 2026 have proven relatively modest as economic worries abound.
“Our airlines carried over 100 million passengers and generated an operating result of more than 2 billion euros – a first in our history,” Chief Executive Ben Smith said in a statement.
That represents an increase of 400 million euros from 2024 and is comfortably above the 1.88 billion euros in earnings before interest and tax forecast by analysts polled by LSEG.
The airline expects to increase its capacity by between 3% and 5% this year as new planes arrive. It also said it wants to widen its operating margin to over 8% by 2028. It reported a margin of 6.1% for 2025.
The better-than-expected results were in part driven by a drop in fuel prices as well as an increase in revenue. Costs continued to creep up with charges at the Netherlands’ Schiphol airport squeezing per-passenger yields.
Growth remained particularly strong on transatlantic routes, particularly for Air France’s premium cabins after the group invested heavily in faster WiFi, upgraded airport lounges and a revamped first class.
Air France-KLM shares are up almost 34% year-on-year as the group has managed to mitigate expensive labour challenges.
Still, analysts have flagged a potential slowdown in Americans travelling to Europe in the year to come as economic woes weigh on consumer spending and long-haul travel intentions.
Reporting by Joanna Plucinska; Editing by Kirsten Donovan
