Equity Reseach: AIR FRANCE-KLM

Air France–KLM S.A., or simply Air France–KLM, is a French-Dutch hub airline headquartered at Charles de Gaulle Airport in Tremblay-en-France. Air France-KLM's strategy combines elements of both differentiation and cost leadership, the two most common competitive strategies, including network optimization, cost reduction, enhanced customer experience, as well as developing more sustainable and efficient operations. From 2023 onwards, with the stabilization of Covid-19 consequences on the industry, the Air France-KLM Group saw a notable rebound its performance and even recorded historical highs in terms of revenues. Having said that, the elaboration of this investment recommendation factored in were sizable risks, both intrinsic to the industry and internal to the Group. In fact, this report issues a HOLD recommendation for Air France-KLM, with a 2025YE price target of €9.68/Sh., using a Free Cash Flow to Firm model, and supported by a Multiples Analysis representing an annualized upside potential of 13.7% against the closing price of €8.51/Sh., as of October 10, 2024, with a high risk. This report was written in accordance with the public information available in October 2024 and any information or event after this date has not been considered.