DAVY VIEW

Air France KLM will report Q3 results on October 31st and will hold its first Capital Markets Day (CMD) under CEO Ben Smith on November 5th. For the former, reflecting the “weaker than foreseen” close-in bookings (commentary provided with the August traffic statistics) and weaker cargo data, we have reduced our operating income by 20% for this year flowing into next. For the latter, we expect the CEO to outline a structural margin recovery story out to FY2024. Making Air France KLM on a par with its other two network airline peers as an investable stock should be the CEO’s primary objective. We retain our ‘Outperform’ rating.