Air France-KLM can close the 2025 financial year with a bang: last year, the group posted a historic net profit of 1,75 billion euros, a remarkable achievement after the horror years of the Covid-19 pandemic.
The group’s recovery is mainly due to a strategic shift towards higher-end customers and an unexpected windfall, such as lower oil prices.
Focus on high-yield travelers
Air France, KLM, and Transavia, which mainly serve the lower segment, carried 102,8 million passengers last year, an increase of 5% compared to 2024. This still falls short of the passenger volume in 2019, when it carried 104,2 million people.
But instead of just fighting for the cheapest tickets à la Ryanair, Air France-KLM has focused heavily in recent years on attracting the so-called “high-yield” traveler, and that effort has paid off.
Revenue from the new Business Class and Premium Economy seats has risen by double-digits. Revenue per passenger is also much higher – travelers pay much more for their seats, especially with the “luxury brand” Air France. In contrast, the additional costs for the airline, such as slightly better food and more space, have remained relatively limited.
Air France performs better than KLM
The Franco-Dutch aviation group achieved record revenues of 33 billion euros, an increase of 4,9%, and operating profit rose for the first time to just over 2 billion euros, 403 million more than a year earlier. Profits from surcharges paid by passengers for their baggage or seat selection rose sharply: +23%, or 2,1 billion euros.
But the group also benefited from an unexpected windfall, such as the drop in oil prices. The fuel bill fell by 394 million euros. Because kerosene accounts for between a quarter and a third of an airline’s total costs, a sharp drop immediately affects net profit.
This has increased fivefold compared to 2024, to 1,75 billion euros – the previous profit record dates from 2023, with 934 million euros. And although the group is posting record figures, there is a striking difference between the two branches.
Air France performed exceptionally well with a margin of 6,7%, while KLM, which focuses on efficiency and network strength, lagged with a margin of only 3,2%.
This lower margin is due to significantly higher airport charges at Schiphol and operational restrictions, such as night closures and noise standards.
Transavia, on the other hand, suffered an operating loss of 52 million euros. The budget airline carried significantly more passengers in 2025 but faced increased competition on routes to European holiday destinations, which put pressure on ticket prices.
Still plagued by debt
Benjamin Smith, the company’s CEO, was therefore delighted yesterday when the figures were presented in Paris. “In general, the strategy of moving upmarket is working quite well,” said Smith, who also assured that neither Air France nor KLM intended to reduce their services to the United States, despite the geopolitical tensions.
Nevertheless, the group is still hamstrung by its debts, which amounted to €8? 4 billion at the end of 2025, an increase of €1 billion in one year, but within reach of its targets.
No dividend payment
For 2026, Air France-KLM expects capacity to increase by 3 to 5%, an increase of less than 2% per unit, and “net capital investments of around €3 billion,” particularly in fleet renewal.
On the other hand, it warned that disruptions to flight schedules due to snowstorms in Paris and Amsterdam in January would reduce operating profit in the first quarter by 90 million euros.
And despite unprecedented profits, Air France-KLM is not planning to pay dividends to its shareholders this year, who have been deprived of them since 2008. Smith said that Air France-KLM would be in a better position to make such payments once it reaches its 2028 target of 8%
