Air France KLM

Large Q2 write-downs; plan for equity by May 2021

  • Sectors : Airlines & Other Transport
  • Companies : Air France KLM

Ratings and price correct at time of issue.

  • Air France KLM

    Closing Price: 357c

  • RATING 11/05/20

  • PREVIOUS RATING 20/01/20

    NEUTRAL

DAVY VIEW

Post the government financial packages, Air France KLM now has €14.2bn in liquidity to weather the crisis; however, it will be a long road ahead to deleverage and restructure, with equity and quasi-equity planned by May 2021. The transformation plan targets have been pushed one year to 2025 (7-8% operating margin) and positive operating free cash flow to 2023. The Q2 operating losses of -€1553m were largely in line with consensus, with write-downs pushing the net loss to -€2612m (Davy: -€2422m).

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Jul 31 2020, 07:25 IST/BST

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