This week will see the first of Europe’s ‘big three’ network airline groups report its fourth-quarter and full-year earnings, with Air France-KLM’s commentary on the outlook regarding demand between Europe and the USA likely to be closely watched.
This week will see the first of Europe’s ‘big three’ network airline groups report its fourth-quarter and full-year earnings.
Air France-KLM’s commentary on the outlook will be closely watched, not least regarding demand for travel between Europe and the USA – a lucrative market for many carriers.
Data examined by Cirium in early February suggested airline bookings for Summer 2026 in both transatlantic directions were down year on year, most significantly in Europe-origin sales.
The football World Cup, which is taking place in June and July in the USA, Canada and Mexico, may explain some of this. As Air France-KLM itself found last year when Paris hosted the summer Olympic Games, having a global sports event in a key market can counter-intuitively have a dampening effect on demand, as non-sports fans travel elsewhere for the duration of the event.
But it is also clear that US government policies and rhetoric, alongside tighter entry rules and outright bans on travel from certain countries, could be dampening passenger demand, particularly for a group like Air France-KLM, which is more exposed to travel from markets such as Africa than its peers.
There are mitigating factors, however. Capacity constraints, for example, mean airlines can deploy aircraft elsewhere and fill them more easily than might otherwise have been possible, meaning lost transatlantic demand can be replaced.
Reflecting that dynamic, Finnair last week said it was having plenty of success in Asia-Pacific and Europe, offsetting weakness on the transatlantic.
At the same time, the weak US dollar is making travel to Europe more expensive for US citizens, but cheaper for those heading in the other direction in many cases.
And strong demand for travel in premium cabins – a particular focus for Air France-KLM with its ‘premiumisation’ effort – has so far been less vulnerable to the negative impact of outside headwinds, offsetting main-cabin weakness.
After Air France-KLM reports on Thursday, IAG will report its earnings next week, with Lufthansa Group following in early March.
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