(BFM Stock Exchange) – The design office lowered its advice to “market performance” this Monday, March 10 against “outperformance”. Bernstein believes that the company will find it difficult to reduce its costs and prefers other groups on the stock market more exposed to transatlantic traffic.

After impressing the scholarship, can Air France-KLM go up even higher? Thursday, March 6, the action took 32.95% signing its highest increase since the merger of KLM and Air France in 2004. The Franco-Dutch group had been carried by results superior to expectations and forecasts that had taken the analysts short.

Bernstein is skeptical about the group’s ability to fly on more demanding stock market altitudes. The design office lowered its opinion to “market performance” against “outperformance” previously, which amounts to moving from “buying” to “neutral” on the action, while adjusting its price of courses to 11.5 euros against 11 euros before.

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Cost reductions that are long

Bernstein issues reservations about the company’s cost reductions. During his day dedicated to investors, at the end of 2023, the Franco-Dutch company had “delivered an optimistic message”, explaining that “there (had) still a lot of costs to withdraw,” recalls the design office. A simplification of the fleet (with less diversity of planes), improving productivity or the redirection of short-music Air France flights in Roissy or Transavia, are as many levers that the company had listed.

Bernstein considers, however, that, so far, the execution has not followed. “There is an obvious opportunity to further reduce the costs of the company, but progress is at a standstill,” judges the financial intermediary.

“The evolution of the unit cost in 2024 was initially planned at +1%to +2%, and finished at +3.2%”, he recalls. “There is again an increase in a figure (unit costs, editor’s note) in 2025, despite the operational disturbances and the costs of implementing computer technologies in 2024”, continues Bernstein. However, “these costs must start to become negative to strengthen confidence in the operating result trajectory and with the company’s objective to improve its operating profit of 2 billion euros between 2023 and 2028”, continues Bernstein.

KLM The new Air France-KLM sick man

Another grievance raised by the design office: Air France-KLM is less exposed than its competitors with the very profitable transatlantic route.

“European aviation has a particular market: the North Atlantic. Air France-KLM has a lower weight in this region compared to its peers (29% of long-haul capacity against 46/47% for Lufthansa/IAG)”, details Bernstein.

However, “in the long-haul, we prefer a larger exhibition to the North Atlantic, and the subponderation of Air France-KLM makes in our opinion (the action Editor’s note) less attractive in the short term”, continues the financial intermediary.

By the way, Bernstein does not fail to underline the inversion of the French report between Air France and KLM. While France only released an operating margin by 2% in 2019, the French company posted in 2024 a rate of 5.1% despite an ultra-defavorable impact (250 million euros in operating profit) of the Olympic Games. Bernstein believes that the tricolor company deserves the “company that has improved”.

In comparison, the Dutch company has generated a “only” margin of 3.3%, without being penalized by Parisian Olympiad. The Dutch group has been penalized by labor and logistics problems and must also be composed with an unfavorable regulatory environment (cap of flights at Schiphol airport, increases in airport fees).

A plan was launched in October by the company to improve its operating profit by 450 million euros.