Air France-KLM expects pick up in margins for 2026-28

Air France-KLM on Thursday forecast a pick up in operating margin for 2026-28 ahead of an investor day in Paris, predicting results would improve by 2 billion euros ($2.2 billion) over the next five years and sending its shares higher.

The company said its operating margin would reach 8 per cent or more in 2026-2028, up from its 2024-26 target of 7-8 per cent.

That would be driven by cost reductions and an improvement in cash flow, the airline said in a statement. It also confirmed its target for sustainable aviation fuel use by 2030. Its shares rose 5 per cent when the market opened.

European airlines have reported strong results in recent quarters on the back of robust post-pandemic travel demand that has withstood economic uncertainty and geopolitical instability.

"We are now well positioned to accelerate further and capture the full potential of our Group's assets to deliver sustained and more profitable growth," said Chief Executive Ben Smith.

The airline added that it would continue to invest in fleet renewal while confirming its outlook for 2024-26, with expected expenditure of 3-3.5 billion euros per year in that period, and up to 3.8 billion in 2027-28.