Air France-KLM cuts capacity growth forecast amid expected $2.4bn fuel bill rise
Summary
Air France-KLM has lowered its plan for growing flight capacity this year due to a $2.4 billion expected rise in fuel costs caused by the Middle East conflict. The airline expects a tough financial period ahead despite some fuel cost savings from its hedging policy.Key Facts
- Air France-KLM cut its capacity growth forecast for 2026 to 2%-4%, down from 3%-5%.
- The airline’s fuel bill is expected to rise by $2.4 billion this year, reaching $9.3 billion total.
- The increase in fuel costs is linked to the Iran war and higher crude oil prices.
- Air France-KLM uses a fuel hedging policy that will save about $1.5 billion.
- The company reported a smaller first-quarter operating loss (€27 million) than analysts expected (€389 million).
- Ticket prices have been raised to help cover higher fuel costs.
- Europe’s smaller airports face risks if jet fuel shortages lead to flight cancellations.
- Despite the crisis, Rolls-Royce plans to keep its profit forecast for the year and is monitoring the situation closely.
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