Air France-KLM is downgrading its 2026 capacity outlook as the war in Iran sends jet-fuel prices through the roof. The Franco-Dutch group now expects to pay $9.3bn for kerosene this year — $2.4bn more than in 2025 and 35% above its pre-conflict forecast of €6.9bn. Of that bill, $1.1bn falls in Q2 alone. The shares still rose more than 1% as the first-quarter print held up: revenue €7.5bn (+4.4%), operating loss €27mn (€301mn better than a year earlier), net loss €252mn (+1.2%).
Capacity growth for 2026 is now guided at 2 to 4%, against 3 to 5% before; long-haul falls to 2 to 4% from 4%, and Transavia (the low-cost arm) to 8 to 10% from 10%. CEO Ben Smith warned the fuel hit "will weigh on the next quarters" but that 60% of the April overcost has already been offset, helped by a 66% average yearly fuel hedge and a 3.4% rise in unit revenue (more premium tickets, an industry-wide capacity cut and a fare surcharge introduced in March). Q1 traffic still grew: 22.3 million passengers (+2.3%) at an 86.3% load factor (+0.3pt).
The group is keeping its powder dry. Liquidity is €10.6bn (€1.3bn more than March 2025), but capex is now guided below €3bn, hiring of support staff is paused and non-essential spending cut. Bernstein analysts read the cut positively, noting it "reflects a profit-friendly environment with strong travel demand". Air France, KLM and Transavia have little Middle East exposure and reallocated capacity to North America, Latin America and Asia. Source: Les Echos, 30 April 2026, Charles Plantade.