Air France-KLM

AF: XPAR (FRA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	€4.00	Wbsc	Qzrw

We Lower Air France-KLM's Fair Value Estimate as We Incorporate a Slower Recovery

Joachim Kotze

Mar 29, 2021

Business Strategy and Outlook

Air France-KLM is a European network carrier with major hubs at Charles de Gaulle Airport in Paris and Schiphol Airport in Amsterdam. The coronavirus dealt a heavy blow to the global airline industry, including Air France-KLM. We believe the crisis presents the group with a unique opportunity to restructure its cost base and renegotiate restrictive labor policies. The more imminent item on the group’s agenda is its unsustainable capital structure, which requires urgent restructuring. As a result, we are negative on the prospects for the group to generate shareholder value due to the high probability of value destruction.

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