Air France-KLM has cut its capacity growth forecast for 2026 to between 2% and 4%, down from an earlier estimate of 3% to 5%. This decision stems from a projected $2.4 billion increase in fuel costs driven by ongoing geopolitical tensions, particularly related to the Iran war.
The airline expects its total fuel bill for 2026 to reach $9.3 billion, which is a significant rise compared to the previous year. Concerns over the blockage of the Strait of Hormuz have pushed Brent crude prices to a four-year high of $126 per barrel.
In the first quarter of 2026, Air France-KLM reported an operating loss of €27 million. This was better than analysts’ projections of a €389 million loss. KLM’s Back on Track improvement program contributed €159 million in savings during this period.
KLM CEO Marjan Rintel stated that the ongoing geopolitical uncertainty and sharply increased fuel prices will pressure results from the second quarter onward. He emphasized that KLM cannot fully pass on these high fuel prices to customers, which will further impact profitability.
Ben Smith, CEO of Air France-KLM, noted that the operating environment remained “uncertain.” As airlines navigate these challenges, cost control measures will be crucial for maintaining financial stability.
Observers expect continued scrutiny on how airlines adapt to fluctuating fuel prices and geopolitical risks. The airline industry faces a complex landscape as it strives for recovery amidst these pressures.