Half year report 2023
1
FIRST HALF YEAR ACTIVITY
REPORT
1.1 ACTIVITY
4
1.1.1 Strategy 4
1.1.2 Business review 6
1.1.3 The Fleet 8
1.1.4 Highlights 11
1.1.5 Outlook and subsequent events 13
1.1.6 Risk factors 15
1.1.7 Related parties 17
1.2 CORPORATE GOVERNANCE
18
1.2.1 The Board of Directors 18
1.2.2
The CEO Committee 22
1.2.3 The Group Executive Committee 22
1.2.4 Stock market and shareholder structure 23
Half Year Report 2023 ― Air France - KLM 3
1.1 ACTIVITY
1.1.1 Strategy
Economic environment:
Real GDP growth (%) 2022 2023
World 3.4 2.8
Euro Area 3.5 0.8
Of which France 2.6 0.7
Of which Netherlands 4.5 1.0
Latin America and Caribbean 4.0 1.6
United States 2.1 1.6
China 3.0 5.2
Japan 1.1 1.3
Sub-Saharan Africa 3.9 3.6
Source
1
From early 2023, the World economic growth projection
was updated upwards, reflecting on ongoing economic
resilience. Inflation is still being high, while expected to
fall back later during the year, due to weaker commodity
prices, less dynamic growth, and easing supply chain
issues, with speed and pace depending on the country.
Spillovers of war in Ukraine stay moderate at this stage,
with tensions and sanctions between West and Russia to
persist long after any ceasefire. Energy prices are
expected to stay moderate, while rationing of energy in
Europe is not expected to happen.
Eurozone is forecasted to have some significant
divergence across region. Southern European economies
outperformed the eurozone average, while Germany fell
into recession during the winter. Recent developments
also show a tighter financial condition and a weaker
demand. US is showing more resilient economy, with
notable strengthening of labor market and positive
signals from consumer spending. China is expected to
continue economic growth, with a sharp rebound after a
late-2022 boarders reopening, leading to an increased
consumer spending and service output, and a recovery in
consumer confidence. The mechanical effect of COVID-19
rebound, and its related growth, is expected to ease-in
late-2023
2
.
Oil price
Brent (US$/bbl) 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2023 Q2
Average Brent price 100.3 113.5 100.7 88.6 81.2 78.3
Average Jet fuel price 120.8 167 141.1 136.8 126.2 95.2
Source
3
During 2022 energy and oil prices had been on a rise and
reached a record level in Q2 2022 (highly impacted by the
Russian invasion of Ukraine). Since its all-time highs,
energy prices have been on a steady decrease, attaining
normalization early-2023. Energy inflation in OECD
countries is expected to further fall down
4
.
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FIRST HALF YEAR ACTIVITY REPORT
ACTIVITY
4 Half Year Report 2023 ― Air France - KLM
1
World Economic Outlook, IMF, April 2023
2
Oxford Economics Global: US strength prompts upgrade to 2023 world GDP growth
3
EIA. Brent and Jet fuel prices. June 2023
4
https://www.oecd.org/newsroom/consumer-prices-oecd-updated-6-june-2023.htm
Currency exchange rates
For one Euro 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2023 Q2
(average)
USD 1.12 1.06 1.01 1.02 1.07 1.09
GBP 0.84 0.85 0.86 0.87 0.88 0.87
CHF 1.04 1.03 0.97 0.98 0.99 0.98
JPY 130.5 138.2 139.3 144.3 142 150
Source
5
After an important depreciation of Euro against US dollar
in 2022, led by different macroeconomic outlooks for the
Eurozone compared to United States (a higher growth
forecast for US, political uncertainty in several large EU
economies and some level of precaution about the
impact of the war in Ukraine), Euro stabilized end-
of-2022 and further strengthened early-2023.
Eurozone inflation remains high, but has already peaked,
and is currently being on a disinflationary path, with
deflationary energy prices, and decreasing inflation in
food prices. Both non-energy industrial goods and
services inflation have declined, resulting in 0.3pt in core
inflation. The inflation is expected to continue to
gradually decrease, resulting in 5.3% for a full year of
2023.
Industrial context:
Worldwide capacity
Worldwide capacity has reached an average of 77% in
2022 (all figures in ASK’s vs. same period of 2019) and
continues its recovery throughout 2023.
– European capacity further reached 93% in June
2023, with most of the regions to recover above
90% and only Europe-Asia flows (mostly
affected by China) to lag at 79% in June 2023;
– US capacity further reached 97% in June 2023
with the number of the regions to recover above
pre-covid levels (Africa, CSA, Caribbean and
Indian Ocean, Middle East, Intra-regional), while
Asia still significantly lag behind at 67%;
– China capacity, after late-2022 full release of
COVID-19 restrictions and a following borders
reopening, experienced a sharp increase in
international flows, recovering to 41% in June
2023 (from 6% average throughout 2022). China
domestic capacity is stable around 120%, and
currently boosting the full China capacity, that
reached 86% in June 2023.
Russian invasion of Ukraine has a limited impact on
worldwide capacity development (with Ukrainian
airspace being fully closed, and Belarusian and Russian
airspaces closed to European airlines). It is mainly
affecting Europe-Asia routes (as airlines are obliged to
lengthen routes distance to avoid closed space), creating
a competitive disadvantage for European airlines,
specifically for those geographically located in North of
Europe (e.g. Finnair).
Industry disruptions
COVID-19 pandemic is not anymore an impediment to Air
Transport. After a series of staff reductions during
COVID-19 period, staff shortages in aviation persist, as,
most of the time, there is a significant delay from the
need identification, towards hiring and a proper training
of qualified personnel. This issue further challenges and
oftentimes delays the capacity recovery for some
business areas (e.g. MRO).
Airlines are still being impacted by supply chain issues
and reliability constraints on some new-generation
engines. The situation is also worsened by the lack of
spare parts (in particular for the GTF of Pratt & Whitney,
as of April 2023: 10,000 days on the ground for 38,000
days flying) and elongated deliveries by aircraft
manufacturers (e.g. less than 80 B787 deliveries by
Boeing in 2023). Therefore, supplies are not at the level
expected for the peak season and the lease market
becoming tense.
On operations side, European airports had been highly
affected by disruptions throughout 2022, mainly due to
higher recovery pace and, on the other hand, lack of
resources for a quick scale up of operations. The issue
was resolved in most airports by the end of 2022.
Early-2023 was further challenged by ATC strikes in
Europe, mostly in France (and to a lesser extent in
Germany), potentially affecting 237K flights (~30% of daily
European flights are estimated to be impacted during 34
days of industrial action in France). This also disturbs an
arrival punctuality in Europe, that has decreased by 9pts
on average during the strikes period (71% vs. 80% on a
normal activity day).
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Half Year Report 2023 ― Air France - KLM 5
5
Boursorama currency exchanges. 29/06/2023
1.1.2 Business review
Network: Operating result more than doubled
Network
Current quarter
Year to date
2023 change change
constant
currency
2023 change change
constant
currency
Traffic revenues (€m) 6,257 +13.1% +13.6% 11,585 +25.8% +25.6%
Total revenues (€m) 6,520 +13.3% +13.8% 12,095 +25.4% +25.2%
Operating result (€m) 692 +340 +342 542 +499 +519
Operating margin (%) 10.6% 4.5 pt 4.5% 4.0 pt
Compared to the second quarter 2022, total revenues
increased by +13.3% to €6,520 million. The operating
result improved by €340 million and amounted to €692
million. The increase in revenues was driven by the
network passenger business while the Cargo revenues
declined compared to a strong second quarter last year
and a further softening of the market.
Robust growth in unit revenue
Passenger network Current quarter Year to date
2023 change change
constant
currency
2023 change change
constant
currency
Passengers (thousands) 18,743 +6.8% 34,530 +17.1%
Capacity (ASK m) 66,714 +8.1% 128,690 +12.6%
Traffic (RPK m) 58,319 +11.1% 111,284 +21.8%
Load factor 87.4% 2.4pt 86.5% 6.5pt
Total passenger revenues (€m) 5,913 +22.3% +22.6% 10,816 +38.3% +38.0%
Traffic passenger revenues
(€m)
5,770 +21.9% +22.3% 10,522 +38.3% +37.9%
Unit revenue per ASK (€ cts) 8.65 +12.8% +13.1% 8.18 +22.8% +22.4%
Second quarter 2023 capacity in Available Seat
Kilometers (ASK) was 8.1% higher than last year and at
88% of 2019 level, which is in line with the Group’s
guidance provided during the first quarter 2023 results
presentation (c.90% versus 2019).
Unit revenue per ASK increased by 13.1% at a constant
currency thanks to strong demand which resulted in an
increase in load factor of 2.4 points and a yield increase of
10% compared to last year at constant currency.
During the second quarter we observed per area the
following trends:
North Atlantic Demand recovery continued to be driven
by Point of Origin North America. Yield increased by 13%
at a slightly higher capacity of 2% while the load factor
increased 4 points compared to last year.
Latin America Very strong yield performance, 12% up
compared to 2022, mainly driven by strong yields close
in.
Asia & Middle East Capacity in the second quarter has
significantly increased vs 2022 by 56%, mainly driven by
China’s reopening. Nevertheless, this is still -34% below
2019 levels. Yields are stable compared to 2022 which is
lower than the other areas, but this is mainly driven by
the exceptional yields in 2022 due to the low capacity.
Caribbean & Indian Ocean The second quarter showed
significant capacity reductions compared to 2022 (-16%)
due to redeployment of fleet to other long haul areas.
The reduction in capacity resulted in very good
performance on yield, 22% up versus 2022.
Africa Strong traffic dynamics with load factor up 3
points compared to 2022. Robust yield at 6% above 2022.
Short and Medium-haul In April the domestic network
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FIRST HALF YEAR ACTIVITY REPORT
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was impacted by ATC strikes. Yield improved by 10%
compared to last year while capacity grew 4%. Load
factor slightly up by 1 point.
Cargo: demand continued to soften resulting in pressure on unit revenues
Cargo business
Current quarter
Year to date
2023 change change
constant
currency
2023 change change
constant
currency
Tons (thousands) 213 -10.0% 421 -10.8%
Capacity (ATK m) 3,557 +6.5% 6,845 +8.4%
Traffic (RTK m) 1,585 -8.5% 3,143 -10.2%
Load factor 44.6% -7.3pt 45.9% -9.5pt
Total Cargo revenues (€m) 606 -33.9% -33.0% 1,279 -30.0% -29.7%
Traffic Cargo revenues (€m) 487 -39.1% -38.4% 1,063 -33.4% -33.1%
Unit revenue per ATK (€ cts) 13.70 -42.8% -42.1% 15.53 -38.6% -38.3%
Total revenues dropped by -33.9% compared to last year.
The resumption of the passenger travel resulted in an
increase in Available Ton Kilometers of 6.5% versus the
second quarter of 2022. Last year, the second quarter still
showed a strong demand and therefore the traffic
decreased year over year by -8.5%. As global economic
growth is slowing down, container prices for sea freight
declined and therefore demand for air cargo softened.
The load factor was 7.3 points below 2022 and due to the
increased belly capacity, the yield declined as well
resulting in a decrease in unit revenue per Available Ton
Kilometer of -42.1% against a constant currency.
Transavia: Encouraging unit revenue development resulting in a break-even result
Transavia
Current quarter
Year to date
2023
change
2023
change
Passengers (thousands) 5,921 +12.8% 9,785 +25.0%
Capacity (ASK m) 11,429 +9.6% 19,037 +19.5%
Traffic (RPK m) 10,179 +14.5% 17,134 +30.3%
Load factor 89.1% +3.9pt 90.0% +7.4pt
Total Passenger revenues
(€m)
712 +18.4% 1,089 +28.2%
Unit revenue per ASK (€ cts) 6.38 +8.8% 5.83 +7.6%
Unit cost per ASK (€ cts) 6.38 +5.6% 6.73 +10.2%
Operating result (€m) 0 +18 -172 -62
Compared to the second quarter 2022, the demand in
leisure traffic continued to grow, despite operational
disruptions due to ATC strikes in France and fleet issues
in the Netherlands. The capacity increased by 9.6%, traffic
increased by 14.5%, and the number of passengers
increased by 12.8% resulting in a load factor 3.9 points
above 2022. Transavia is still expanding its network, with
a capacity growth in available seat kilometers of +20%
compared to 2019 and the routes are yet to mature
further. Transavia was able to improve further in the
second quarter to a break-even operating result, which is
promising for the Q3 peak season for which strong
bookings are already visible.
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Maintenance business: continued growth on third party revenues despite supply chain
Maintenance
Current quarter
Year to date
2023 change change
constant
currency
2023 change change
constant
currency
Total revenues (€m) 1,055 +15.8% 1,981 +13.7%
Third party revenues (€m) 384 +11.3% +12.0% 753 +17.3% +14.2%
Operating result (€m) 46 -11 -10 62 -39 -42
Operating margin (%) 4.4% -1.9pt -1.8pt 3.1% -2.7pt -2.8pt
Total revenues increased by 15.8% compared with the
same quarter last year while third party revenues
increased by 12.0% at constant currency, showing a
robust recovery. Due to the tight labour market and
supply chain disruptions, the average time for
maintenance increased, resulting in less growth
opportunities for third party revenues impacting the
profitability. The operating margin in the second quarter
stood at 4.4%, which is 1.9 points lower than in 2022.
1.1.3 The Fleet
At June 30, 2023, the Air France-KLM Group fleet
comprised 540 aircraft, of which 521 were in revenue
service compared with, respectively, 522 and 505 aircraft
at December 31, 2022.
The main operational fleet consisted of 426 aircraft (412
aircraft at December 31, 2022), of which 171 were long-
haul aircraft (168 at December 31, 2022), 6 were cargo
aircraft (6 aircraft at December 31, 2022) and 249 were
medium-haul aircraft (238 at December 31, 2022)
including 108 aircraft in the Transavia Group fleet (98
aircraft at December 31, 2022).
The regional fleet in operation comprised 95 aircraft (93
at December 31, 2022).
At June 30, 2023, the average age of the aircraft in the
operational fleet was 12,2 years, of which 12,5 years for
the long-haul fleet, 12,9 years for the medium-haul fleet,
20,3 years for the cargo fleet and 9,2 years for the
regional fleet compared with 12,1 years at December 31,
2022, of which 12,2 for the long-haul fleet, 13,2 for the
medium-haul fleet, 19,8 for the cargo fleet and 8,9 for the
regional fleet.
At June 30, 2023, 36,9% of the total Group fleet was fully
owned (37,0% at December 31, 2022), 12,6% was under
finance lease (13,0% at December 31, 2022), and 50,6%
under operating lease (50,0% at December 31, 2022).
There were firm orders outstanding for 166 aircraft at
June 30, 2023, operational lease excluded, after deliveries
of 12 owned aircraft. Options stood at 57 aircraft (57 at
December 31, 2022).
The operational fleet comprise 94 new generation
aircraft, 18,0% of its fleet.
Change in the Air France – KLM Group’s order
book⁽¹⁾
December 31,
2022
Deliveries
during the
period New orders
Option
conversions June 30, 2023
Main fleet 178 12 – – 166
Regional fleet – – – – –
Total 178 12 – – 166
(1) Excluding operating leases.
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Change in the Air France – KLM Group’s option
portfolio ⁽¹⁾
December 31,
2022
Exercize
during the
period
Options
cancelled or
expired New options June 30, 2023
Main fleet 57 – – – 57
Regional fleet – – – – –
Total 57 – – – 57
(1) Excluding operating leases.
Fleet management
Air France-KLM is pursuing an active policy of renewal
and modernization of its fleet, thus contributing to the
improvement of its energy efficiency and the reduction
of its environmental footprint.
During the first half of 2023, the Air France Group thus:
― in Medium-haul, took delivery of nine new
A220-300s. Six Airbus A320 family aircraft were sold
or returned to their owners.
― HOP! sold two CRJ 1000s
― Transavia France took delivery of eleven Boeing
737-800s and retired a 737-800.
KLM added three new 787-10, Cityhopper, welcomed two
new Embraer 195 E2 into its fleet and Transavia
Netherlands five 737-800. KLM has exited three 737-700
of its fleet.
The modernization of the fleet will be expressed by the
continued growth of the A350-900 fleet within Air France
and that of the B787-10s at KLM. The continued growth of
the fleets, for Air France of the A220-300s and for KLM of
the E195-E2, also contributes to this major effort to
modernize the fleet and reduce emissions, as well as the
upcoming arrival of the Airbus A320 Neo and A321 Neo in
the group's medium-haul fleet.
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The Air France – KLM fleet at June 30, 2023:
AF (incl.
HOP!)
KL (incl.
KLC &
Martinair)
Transavia
France
Transavia
NL
Fully
owned
Finance
lease
Operating
lease Total
Long-haul 110 65 – – 70 39 66 175
B777-300 43 16 – – 20 15 24 59
B777-200 18 15 – – 28 1 4 33
A350 20 – – – 3 7 10 20
B787-10 – 10 – – 2 8 – 10
B787-9 10 13 – – 4 7 12 23
A380-800 4 – – – 2 1 1 4
A330-300 – 5 – – – – 5 5
A330-200 15 6 – – 11 – 10 21
Medium-haul 104 42 70 44 91 11 158 260
B737-900 – 5 – – 5 – – 5
B737-800 – 31 70 40 34 8 99 141
B737-700 – 6 – 4 7 – 3 10
A321 16 – – – 9 – 7 16
A320 39 – – – 4 3 32 39
A319 15 – – – 10 – 5 15
A318 9 – – – 5 – 4 9
A220-300 25 – – – 17 – 8 25
Regional 36 63 – – 34 18 47 99
Canadair Jet 1000 4 – – – 4 – – 4
Embraer 190 19 30 – – 17 4 28 49
Embraer 175 – 17 – – 3 14 – 17
Embraer 170 13 – – – 10 – 3 13
Embraer 195 E2 – 16 – – – – 16 16
Cargo 2 4 – – 4 – 2 6
B747-400BCF – 1 – – 1 – – 1
B747-400ERF – 3 – – 3 – – 3
B777-F 2 – – – – – 2 2
Total AF-KLM 252 174 70 44 199 68 273 540
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1.1.4 Highlights
Highlights since the release of the 2022 Universal
registration Document
On May 04, 2023, Air France-KLM enters into
exclusive discussions with Apollo Global
Management for a €500 million financing into an
affiliate owning Engineering and Maintenance
(MRO) assets
On the occasion of its Full Year 2022 results presentation,
Air France-KLM announced its intention to pursue further
balance sheet strengthening measures. The Group
announces today that it has entered into exclusive
discussions with Apollo Global Management regarding
the potential financing of €500 million of a dedicated
operating affiliate of Air France, owning a pool of assets
of Air France dedicated to its Engineering and
Maintenance Activity (spare components). The proceeds
of the transaction would be allocated to General
Corporate Purposes.
This financing would be non-dilutive, structured through
a quasi-equity financing instrument, similarly to the one
raised by Air France on a pool of spare engines in July
2022.
The contemplated structure related to this financing
would involve no change on operational and social
aspects. Therefore, there would be no change in the way
to use the spare components, and no impact on Air
France or Air France-KLM employees contracts.
The instrument would be qualified as equity under IFRS,
hence strengthening Air France-KLM’s and Air France’s
balance sheet (please also refer on this subject to the
section “Outlook and subsequent events” below).
On June 16, 2023 - Air France-KLM: key decisions
approved by the Shareholders’ Meeting of June 7,
2023
The Air France-KLM Annual General Shareholders’
Meeting was held on Wednesday June 7, 2023 at 14h30 at
the Hilton Paris Charles de Gaulle Hotel, 8 rue de Rome,
93290 Tremblay-en-France. It was broadcast live via
webcast on the Air France-KLM website. It is also
possible to watch it at any time on replay via the
following link: https://www.yuca.tv/en/air-france-klm/
ag-2023-air-france-klm.
During this Combined Ordinary and Extraordinary
Shareholders’ Meeting, where more than 7,924
shareholders were present or represented, all of the
proposed resolutions were adopted. In addition to
approving the financial statements for the year ended
December 31, 2022 and allocating the net result, the
Shareholders’ Meeting adopted the following resolutions:
Appointments/Re-appointments:
a) Mr. Benjamin Smith, Chief Executive Officer of
Air France-KLM was re-appointed as a Board director for
a four-year term of office (resolution 6) ;
b) As proposed by the French state and after
ratification, Mr. Pascal Bouchiat was reappointed as a
Board director for a four-year term of office (resolutions 7
and 8);
c) CMA CGM, whose permanent representative is
Mr. Ramon Fernandez, has been confirmed as a Board
director (ratification of the cooptation), for the remainder
of its predecessor’s term of office, Mr. Rodolphe Saadé,
i.e. until the end of the Shareholders’ Meeting convened
to approve the financial statements for the financial year
ending December 31, 2025 (resolution 9):
d) M. Cees ‘T Hart was re-appointed as a Board
director for a one-year term of office (resolution 10);
e) As proposed by the French state, Mr. Yann
Leriche was appointed as a Board director for a four-year
term of office (resolution 11).
Approval of related party agreements relating to:
a) The partial redemption of the Undated Deeply
Subordinated Notes subscribed by the French State
(resolution 4);
b) The conclusion of a commercial cooperation
agreement between the Company, Air France and KLM,
on the one hand, and CMA CGM Air Cargo and CMA CGM,
on the other hand (resolution 5).
Compensation:
a) Approval of the information on the
compensation of each of the corporate officers required
by Article L. 22-10-9 I of the French commercial Code
(resolution 12);
b) Approval of the elements of compensation paid
in the financial year 2022 or granted in respect of that
financial year to the Chair of the Board of directors and
the Chief Executive Officer (resolutions 13 and 14);
c) Approval of the 2023 compensation policy of the
non-executive corporate officers, the Chair of the Board
of Directors and the Chief Executive Officer (resolutions
15 to 17).
Financial authorizations/delegations:
a) Authorization granted to the Board of Directors
to carry out transactions involving the Company’s shares
(resolution 18);
b) All of the financial delegations were approved.
These resolutions are detailed on page 31 and following of
the convening notice (resolutions 19 to 32);
c) Approval of the delegation of capital increase
limited to 10% of the share capital allowing greater
flexibility in pricing (resolution 33);
d) Approval of resolutions authorizing capital
increase reserved for employees limited to 3% of the
share capital (resolutions 34 and 35);
e) Approval of resolutions authorizing a reverse
share split and a capital reduction (resolutions 36 and 37).
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Amendments of the Articles of Incorporation:
a) Amendment of Article 18 of the Articles of
Incorporation on the term of office of Board directors in
order to provide for the possibility of a term of office of
less than four years to ensure the staggered renewal of
Board director mandates (resolution 38);
b) Amendment of Article 26 of the Articles of
Incorporation relating to the age limit for Company
officers to specify that, in the event that the duties of the
Chief Executive Officer and the Chair of the Board of
Directors are separated, when the age limit of 72 years for
the Chair of the Board of Directors is reached during his
or her term of office, the latter will continue to perform
his or her duties as Chair of the Board of Directors until
the end of his or her term of office as a Board director
(resolution 39).
The detailed results of the voting and all the
documentation relating to the Shareholders’ Meeting are
available on the Air France-KLM website (https://
www.airfranceklm.com/en/finance/shareholders/
shareholders-meeting).
On June 19, 2023 - Description of the share buy-
back program authorized by the Shareholders’
meeting on June 7, 2023
Pursuant to Article 241-2 of the General Regulations of
the Autorité des Marchés Financiers (AMF), the purpose
of this description is to present the objectives and terms
of the share buyback program authorized by the
Shareholders’meeting of June 7, 2023.
• Securities concerned: ordinary shares issued by AIR
FRANCE – KLM.
• Maximum amount of the share capital that may be
acquired by the Company: 5 %.
• Maximum number of shares that may be acquired by
the Company, based on the number of shares
composing the share capital as of May 31, 2023:
128,526,806, but considering the 29,956 treasury shares,
only 128,496,850 shares may be purchased.
• Allocation of the treasury shares as of May 31, 2023: the
29,956 treasury shares as of May 31, 2023
will be allocated to meet obligations arising from share
allotment plans in respect of the remuneration of
corporate officers.
• Maximum purchase price per share: €4 (excluding fees)
or, in the event of the implementation of a
reverse share split referred under the terms of 36th
resolution, €40 (excluding fees).
• Objectives :
The objectives of the share buyback program under the
terms of 18th resolution of the Shareholders’ meeting of
June 7, 2023 are as follow:
a. to allow an investment firm to coordinate stock
liquidity within the framework of a liquidity contract in
compliance with the Compliance Charter recognized by
the AMF,
b. to allocate shares upon exercise of the rights to shares
attached to securities issued by the Company or by
companies in which it holds, either directly or indirectly,
more than half of the share capital and that grant the
right to the allocation of Company shares via conversion,
exercise, repayment, exchange, presentation of a warrant
or any other means,
c. to carry out any allocation or sale of shares to
employees and/or corporate officers of the Company
and companies, located in France or internationally,
related to it under the conditions set forth in Article L.
225-180 of French Commercial Code, any allocation of
free shares, any employee shareholding scheme, any
Company compensation scheme, within the context of,
in particular, the relevant provisions set forth under the
French Commercial Code and/or French Labor Code, or
French or foreign legal and regulatory provisions and the
execution of any hedging transaction associated with
these related party transactions and commitments of the
Company, under the conditions provided for by the
market authorities and at the times at which the Board of
Directors or the person acting pursuant to a delegation of
power granted by the Board of Directors takes action,
d. to hold or remit shares in order to use them as
payment or in an exchange offer within the framework of
external growth transactions,e. and, more generally, to
engage in any market practice that may be admissible by
law or by the AMF and to execute any transaction in
compliance with the applicable regulations, it being
specified that, in such a case, the Company would inform
its shareholders by means of a press release.
▪ Duration of the program: 18 months as of the
Shareholders’ meeting of June 7, 2023.
June 19, 2023 - Acquisition of AIR FRANCE - KLM
shares in the payment of long-term compensation
plans
Air France–KLM (the "Company") will buy back shares for
hedging purposes [specific long-term 2019-2021 and
2020-2022 plans benefiting managers and/or employees
of the Group.
The acquisition relates to a maximum number of
[760,000] shares, representing approximately [0.03%] of
the share capital.
This operation falls within the framework of the
authorization given by the Combined General Meeting of
Shareholders of May 7, 2023 in its 18th resolution and will
be carried out in accordance with the authorization of the
Board of Directors and the provisions of Regulation (EU)
596/2014 on market abuse and Commission Delegated
Regulation (EU) 2016/1052.
On June 22, 2023 - EDF, Holcim, IFPEN and Axens
join forces to participate together in the creation
of the French e-fuels air transport industry, with
the "Take Kair" project, supported by Air France-
KLM
The objective of this cooperation is to take advantage of
the complementary expertise of the signatories in order
to contribute to the decarbonization of air transport and
to support the emergence of the French e-SAF
(Sustainable Aviation Fuel) industry, thanks to an
industrial pilot project called "Take Kair", in Pays de la
1
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12 Half Year Report 2023 ― Air France - KLM
Loire, France. The Air France-KLM Group supports the
project.
Holcim, IFPEN (IFP Energies nouvelles), Axens and EDF
announce that they have signed Memorandum of
Understanding to develop "Take Kair", an innovative
industrial e-kerosene pilot in Pays de la Loire, which will
meet the needs of the new French e-SAF industry. The
Air France-KLM Group would be the main off-taker of the
ekerosene produced by this new industrial facility. The
production of hydrogen and synthetic fuels would take
place in Loire-Atlantique, France, with commercial
openings, either local, regional or national.
This cooperation will contribute to the development of
the French SAF production industry, a priority raised by
the French President of the Republic during his speech
on 16 June 2023. The production of e-kerosene will
contribute to the decarbonization of air transport and this
project anticipates the future European regulation
"ReFuel Aviation".
The success of this project relies on the commitment of
the partners to explore opportunities for industrial
cooperation, based on their respective expertise:
a) For the Holcim group, the capture of biogenic
CO2 of its cement plant located in Saint-Pierre-La-Cour
in Mayenne, France, in line with its plan to decarbonize its
production sites, integrating programs to capture and
recover CO2 emissions to allow the production of green
e-fuels for aviation.
b) For IFPEN and Axens, the development and
integration of low-carbon fuel synthesis processes and
their experience in SAF production technologies.
c) For the EDF Group, the development of its CO2-
neutral electricity production facilities and the know-how
developed both by its subsidiary Hynamics, specialized in
the production of low-carbon and renewable hydrogen
by water electrolysis, and by its engineering department
allowing the security of its major industrial projects.
The "Take Kair" project, one of the first industrial e-SAF
production projects in France, will avoid the emission of
more than one hundred kilotons of CO2 per year. It is
therefore in line with the French government's objectives
in terms of decarbonizing air transport and it will be a
candidate for public financial support for the emergence
of a French e-fuel industry, which is why it was presented
at the beginning of 2023 to The French Agency for
Ecological Transition ADEME and to the French Ministries
in charge of of Energy Transition, of Industry and of
Transport. Provided the necessary financing is obtained,
the objective is to start the construction of the industrial
pilot in 2026 for a first phase of production in 2028.
A pioneer in the experimentation and use of SAF, the Air
France-KLM Group is a partner in the project. As the
world's largest buyer of SAF in 2022, the Group aims to
incorporate at least 10% SAF into its global flights by
2030, beyond French and European regulatory
obligations. The use of e-kerosene from the "Take Kair"
project will contribute to the achievement of this
objective and the more global objective of a 30%
reduction in CO2 emissions per passengerPress release
Date: June 22, 2023 kilometer by 2030 compared to 2019.
By joining the "Take Kair" project, Air France-KLM gives it
the opportunity to access the emerging SAF market in
Europe as well as the visibility and bankability that will be
necessary for its financing.
1.1.5
Outlook and subsequent events
Outlook
Capacity
The Group expects the capacity in Available Seat
Kilometers for Air France-KLM Group including Transavia
at an index of:
• Circa 95% for the third quarter of 2023
• Above 95% for the fourth quarter of 2023
• Circa 95% for the Full Year 2023
All indices compared to the respective period of 2019.
Unit cost
6
Due to the inflationary pressure, mainly driven by CLA
increases, profit sharing, load factor impact and a
decrease in the forecasted capacity, the Group expects
from now on for 2023 a low single digit increase of the
unit cost increase compared to 2022.
Capex
Full year 2023 net capex is estimated at 3.0 billion euros.
Medium term outlook
7
The Group continues its swift transformation initiatives
and confirms its medium-term financial ambition with
the long-term focus of achieving increased
FIRST HALF YEAR ACTIVITY REPORT
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Half Year Report 2023 ― Air France - KLM 13
6
Against a constant fuel price, constant currency and excluding furlough contribution
7
Refers to 2024-2026 period
competitiveness. To do this, the Group remains agile in
optimizing fleet, workforce, network, costs and continues
its sustainability efforts. The Group expects capacity in
Available Seat Kilometers back to 2019 levels as from
2024.
The transformation efforts of the Group, including FTE
reduction, fleet renewal and spend optimization, will
compensate the inflationary pressure on cost. Therefore,
the Group expects to decrease its unit cost in the period
2024-2026 year over year against a constant fuel price,
constant currency and excluding Emission Trading
Scheme costs (ETS).
The Adjusted Operating Free Cash Flow excluding
exceptionals is expected to remain positive. Exceptionals
include the payment of the air-freight litigation and the
deferrals of social charges, pensions and wage taxes
accumulated during the Covid 19 period.
The Net Debt/EBITDA target ratio is expected to remain
between 1.5x and 2.0x.
The Group’s medium-term financial ambition is to reach
an Operating Margin of 7% to 8%.
Subsequent events
On July 12, 2023 - Air France - KLM reverse share
split and share capital reduction
Air France - KLM (the "Company") today announces the
implementation of (a) the reverse share split of all
outstanding shares of the Company and (b) the share
capital reduction by way of a reduction in the nominal
value of the shares decided by the Board of Directors at
its meeting on 4 July 2023 in accordance with the thirty-
sixth and thirty-seventh extraordinary resolutions of the
Combined General Meeting of 7 June 2023 (the "General
Meeting").
a) Reverse share split of the Company's shares
The reverse share split will result in the allocation of 1 new
ordinary share with a par value of 10 euros for 10 existing
ordinary shares with a par value of 1 euro, and in a division
by 10 of the number of outstanding shares.
The reverse share split is a purely technical exchange
with no direct impact on the total value of the Company's
shares held by each shareholder.
The reverse share split transactions will begin on 31 July
2023, with an exchange period open from that date until
30 August 2023 (inclusive) to enable shareholders who do
not hold a number of shares that is a multiple of 10 to buy
or sell their fractional shares in order to obtain a number
of shares that is a multiple of 10. The reverse share split
will occur on 31 August 2023.
A notice of reverse share split is published today in the
Bulletin des Annonces Légales Obligatoires (BALO).
Details of the reverse share split will be set out in a press
release to be published no later than the start date of the
reverse share split operation.
a) Share capital reduction through decrease of the
Company's shares par value and allocation of the amount
of the reduction to the "share premium" account
At its meeting on 4 July, the Board of Directors decided
to implement the share capital reduction in accordance
with the terms of the authorisation granted by the
General Meeting.
The par value of each share in the Company will be
reduced from 10 euros to 1 euro, i.e. a reduction of 9
euros per share. The amount of this share capital
reduction will be allocated to the "share premium"
account.
After the share capital reduction, the new shares’ par
value will be identical to the par value of today’s shares
(before the reverse share split).
The reduction in par value and allocation to the "share
premium" account is purely technical, with no impact on
the market value of the Company's shares or on the
number of outstanding shares.
Until 26 July 2023, old shares of Air France-KLM
(FR0000031122) will remain eligible for the DSS (Deferred
Settlement Service) and may therefore continue to be
subject to deferred settlement.
From 26 July 2023, they will no longer be eligible for the
DSS and shall be subject to immediate settlement until
their last trading date, i.e., 30 August 2023.
From 31 August 2023, the date of their admission to
trading, the new shares of Air France-KLM
(FR001400J770) will be eligible for the DSS.
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14 Half Year Report 2023 ― Air France - KLM
Calendar:
12 July 2023 Publication of the notice of reverse share split at the BALO
20 July 2023 Suspension of exercise of securities giving access to the
capital.
26 July 2023 Suspension of the deferred settlement service (DSS) of the
old shares
31 July 2023 Start of the reverse share split transactions
31 July until 30
August 2023
(inclusive)
Possibility for the shareholders to buy and sell shares to
obtain a number of shares without odd lots.
31 August 2023 Effective date of reverse share split and capital reduction
31 August until 2
October 2023
Compensation of shareholders with fractional shares by their
financial intermediary.
On July 14, 2023 - Air France-KLM and Apollo
Global Management sign a definitive agreement
for a €500 million quasi-equity financing for Air
France’s Engineering and Maintenance (MRO)
components activity
Air France-KLM and Apollo Global Management (NYSE:
APO) today announced that they have signed a definitive
agreement for Apollo-managed funds and entities
(“Apollo”) to raise a €500 million financing into an
operating affiliate of Air France that will own a pool of
components dedicated to Air France’s Engineering and
Maintenance activities.
Under this agreement and subject to customary closing
conditions, Apollo will subscribe to perpetual bonds
issued by this ad hoc operating affiliate and this financing
will be accounted as equity under IFRS. The financing’s
proceeds will be allocated to general corporate purposes
and support future components expenditures related to
the maintenance activity.
The perpetual bonds will bear an interest rate of 6.9% for
the first 3 years and gradual step ups and caps will be
applied thereafter. Air France will have the ability to
redeem them at any time after 3 years.
This transaction will incur no change of ownership,
operational and social aspects of Air France Engineering
and Maintenance activity. There will be no change in the
way Air France uses the components and executes the
maintenance contracts, and no impact on Air France or
Air France-KLM employees’ contracts.
The transaction is part of the Group's overall IFRS equity
restoration plan, as announced in February 2023 during
the Full Year 2022 financial results.
1.1.6 Risk factors
The risk factors to which the Air France-KLM Group is
exposed are those outlined in the 2022 Universal
Registration Document filed with the AMF on April 24,
2023 under the number D.23-0329 (Chapter 3 “Risk
factors”). Except for what is following, the nature of these
risks did not change significantly during the first half of
2023.
3.1.2.3 Loss of flight slots or lack of access to
flight slots
Description of the risk
Given their saturation, serving major European airports is
subject to obtaining slots which are allocated under the
conditions defined by EU Regulation No. 95/93. In
application of this text and by virtue of a historical
precedence, the series of slots held by an aircraft
operator is reserved for it from one season to the next if
the latter operates at least 80% of the slots over the
period in question. Below this threshold, unused slots are
lost by the carrier and placed in a pool. Each year, the
coordinator in charge of slot management is assigned the
task of allocating the released slots to operators who
request them. In addition to the potential loss of slots
due to a poorly anticipated market development, there is
also the risk of a major crisis making it impossible to use
the allocated rights. This was notably the case during the
Covid-19 crisis, when air carriers had to drastically reduce
their frequencies.
It should be noted that on June 24, 2022, the Dutch
government announced its intention to reduce the
maximum capacity of Schiphol airport to 440,000 flight
movements per year, i.e. a reduction of 12% compared to
the current 500,000. This measure was supposed to
enter a transition period from November 1st, 2023, and
final implementation as of November 1st, 2024.
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Half Year Report 2023 ― Air France - KLM 15
Impact
The loss of slots or no access to slots due to volume
limitations or saturation could have an impact on
companies’ results or their development. As a slot lost to
a competitor is inherently difficult to recover, a lack of
anticipation and adaptation could lead to a reduction in
market share over time.
The potential impact and the measures to be taken by
KLM following the Dutch government's announcement
are currently being investigated (in this respect, please
also view section ”Highlights of the 2023 Financial Year”
above) .
Mitigation plan
The Group is carefully implementing the provisions of the
European Regulation on the allocation of slots, which
guarantees that a carrier will be able to retain the use of
these slots from one season to the next once they have
been used 80% of the time, except in exceptional
circumstances (see below for the specific case of post
Covid-19 recovery). To this end, a particular effort is made
to monitor changes in demand and to anticipate new
customer expectations. The group is thus able to adapt
its offer flexibly to the variables specific to each airport,
thanks to the diversity of the brands in its portfolio. In
addition, all the airlines are working with their national
authorities to ensure that the capacity they need for
growth is regularly available at their main hubs.
In view of this clearly identified risk regarding the
announcement of the Dutch government to reduce the
number of movements at Schiphol airport, the whole
group is trying to protect itself and is implementing the
necessary means of preservation. Together with IATA,
Delta Air Lines, A4A, BARIN, Corendon, TuiFly and
easyJet, KLM has appealed at the Supreme Court against
the court judgment of 7 July 2023. This court judgement
indicated that the Minister could apply an experimental
regulation (with 460 000 flights movements) which is
considered not to be prohibited in the Aviation Act and
not against European law.
3.1.2.6. Commitment vis-à-vis the European
Commission
Description of the risk
a) Merger regulation and cooperation agreements
In 2004, for the European Commission to authorize the
business combination between Air France and KLM, the
latter two companies made a number of commitments,
notably with regard to the possibility of making landing
and takeoff slots available to competitors at certain
airports. Other remedies were introduced following the
May 2015 decision on the transatlantic joint-venture.
b) State Aid
In 2020, the implementation of the measures to reinforce
the Group’s liquidity (a loan guaranteed by the French
State (PGE) in the amount of €4 billion and a €3 billion
loan from the French State, together with a revolving
credit facility of €2.4 billion guaranteed by the Dutch
State and a €1 billion loan from the Dutch State), were
approved by the European Commission under State aid
rules (decisions of May 4, 2020 and July 13, 2020, the
latter having been annulled on May 19, 2021 by the
General Court of the European Union for failure to state
reasons and replaced by another positive Commission
decision of July 16, 2021 correcting this defect).
On April 6, 2021, the Group announced the first part of its
overall recapitalization plan. Certain measures in this plan
contained State Aid, which were accordingly notified by
the French authorities to the European Commission, the
latter approving them in its decision of April 5, 2021
pursuant to the rules pertaining to State Aid. This
decision made the approval of the measures subject to a
number of commitments undertaken by the French State
and leading notably to the allocation by Air France of
landing and take-off slots to a designated third-party
carrier at Orly airport. Other undertakings by the French
State were also imposed to the Group companies (to the
exception of KLM and its subsidiaries) within the
framework of the European Commission’s Temporary
Framework for State Aid (such as restrictions on
acquisitions, share buybacks and dividend payments) and
could have an impact on the Group’s activities. All these
constraints have disappeared since the full repayment of
this recapitalisation aid on April 19, 2023 (see "Mitigation
plan" below). Only the provision of slots at Orly is still
being implemented in accordance with the Commission's
decision.
Like most of decisions with respect to airlines receiving
State support in the context of the Covid-19 crisis, the
European Commission’s decisions granting support
measures to Air France and KLM have been subject to
annulment proceedings brought by Ryanair. T three cases
concerning the Group (which, together with Air France
and KLM, is intervening in support of the European
Commission, as are the French and Dutch governments)
gave rise to oral hearings which were held before the
General Court of the European Union on May 22, 2023
and July 7, 2023. These cases are under deliberation. The
judgments of the General Court is likely to be delivered in
late 2023 or early 2024.
Impact
a) Merger regulation and cooperation agreements
Failure to comply with merger control or antitrust
commitments entails financial, reputational, and
structural risk for the Group.
b) State Aid
The commitments made in connection with the
European Commission's approval of the State aid have
been fully complied with and have come to an end (the
provision of slots at Orly is still being implemented in
accordance with the Commission's decision). The risks
associated with a possible failure to comply with these
commitments have disappeared as of the date of this
report, provided that this latest provision remains
compliant as it stands.
The Group cannot rule the possible risk of annulment of
the above-mentioned approval decisions following the
judgments of the General Court. In this case, as the aid
granted has already been repaid in full compliance with
1
FIRST HALF YEAR ACTIVITY REPORT
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16 Half Year Report 2023 ― Air France - KLM
the related constraints (commitments, behavioral
measures, payment of interest), any risk resulting from a
possible annulment remains limited.
Mitigation plan
a) Merger regulation and cooperation agreements
The Air France – KLM Group has ascertained that the
eventual consequences of slot availability under the 2004
and 2015 remedies remain admissible and do not affect
the economics of the lines in question. Air France – KLM
also regularly contacts the Commission to discuss the
need to maintain these commitments adopted more than
sixteen years ago. In this respect, the European
Commission lifted on 24 February 2023 the commitments
taken by Air France and KLM in 2004 on the Paris-
Amsterdam route.
b) State Aid
The Group has implemented its growth plan in the
respect and in a manner which is fully compatible with
the commitments made within the framework of the
State aid packages. Pursuant to the European
Commission’s decision of April 5, 2021, the Monitoring
Trustee appointed to monitorthe respect of the
commitments undertaken by the French State and the
Group has completed its mission with the full repayment
of the recapitalisation aid described below. Nevertheless,
it remains responsible for the continued implementation
of the abovementioned provision of slots at Orly. A State
Agent has also been appointed by the Dutch State,
responsible for verifying the application of the measures
set forth into the agreement concerning State Aid
entered into with the Dutch State. On April 17, 2023, KLM
concluded a new revolving credit facility linked to ESG
KPis with a pool of international financial institutions, for
an amount of €1 billion. This facility replaced both the
remaining direct loan granted to KLM by the Dutch State
and the credit facility guaranteed by the Dutch State,
both of which were cancelled by KLM. Pursuant to this
cancellation, conditions attached to this aid no longer
apply and, consequently the mission of the State Agent
ended.
It should also be noted that in the course of 2022 and
2023, the Group repaid part of the loans guaranteed by
the French State (PGE) made available to it in order to
strengthen its cash and liquidity position. During the
same period, the Group has already partially repaid the
Covid-19 recapitalisation aid granted in the form of quasi-
equity in April 2021 following the conversion of the
French State's direct loan of €3 billion.
Finally, on March 17, 2023 and again on April 19, 2023, the
Group repaid and refinanced, through the use, approved
by the European Commission on February 16, 2023, of
part of the €1.4 billion compensation aid for the Covid-19
damage suffered from March to June 2020, the full
balance of the April 2021 Covid-19 recapitalisation aid that
was subject to the aforementioned commitments and
constraints. In addition, under the terms of the Covid-19
Temporary Framework, the French State was able to
retain the shares subscribed in April 2021, the latter
Covid-19 recapitalisation aid being deemed to have been
repaid after two years had elapsed since it was granted
and the payment of its specific remuneration. As a result,
Air France-KLM holding and Air France are no longer
liable for any Covid-19 recapitalisation aid and are
therefore fully released from the aforementioned
undertakings and constraints which were linked to this
Covid-19 recapitalisation aid, thus lifting the
aforementioned restrictions imposed by the European
Commission.
1.1.7 Related parties
The information concerning related parties can be found
in Note 26 to the consolidated financial statements.
FIRST HALF YEAR ACTIVITY REPORT
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Half Year Report 2023 ― Air France - KLM 17
1.2 CORPORATE GOVERNANCE
1.2.1 The Board of Directors
At June 30, 2023, the Board of Directors was composed
of nineteen members, of whom:
– Sixteen Board directors appointed by the
General Shareholders’ Meeting
8
;
– One representative of the French State
appointed by ministerial decree
9
and
– Two representatives of the employees, one of
whom appointed by the Comité de Groupe
Français and the other appointed by the
European Works Council
10
.
During the first half of 2023, the composition of the Board
of Directors saw a number of changes, as shown in the
following table:
Departure Appointment Re-appointment
Karim Belabbas (1)
Resignation
Didier Dague (6)
The Comité de Groupe Français
Pascal Bouchiat (10)
Shareholders’ Meeting of June 7, 2023
Stéphanie Besnier (2)
Resignation
May Gicquel (7)
Ministerial Decree of March, 15 2023
May Gicquel (7)
Ministerial decree of March 15, 2023
Rodolphe Saadé (3)
Resignation
CMA CGM (8)
Shareholders’ Meeting of June 7, 2023
Cees’ T Hart (11)
Shareholders’ Meeting of June 7, 2023
Jean-Dominique Comolli
(4)
AGM of June 7, 2023
Yann Leriche (9)
Shareholders’ Meeting of June 7, 2023
Terence Tilgenkamp (12)
The European Work Council of Air
France-KLM
Isabelle Parize (5)
Resignation
Benjamin Smith (13)
Shareholders’ Meeting of June 7, 2023
(1) Mr. Karim Belabbas, director representing employees, resigned
from his mandate on March 11, 2023.
(2) Ms. Stéphanie Besnier resigned from her mandate on March 1,
2023.
(3) Mr. Rodolphe Saadé resigned from his mandate on April 19,
2023.
(4) Mr. Jean-Dominique Comolli's mandate as Director expired at
the end of the Shareholders’ Meeting of June 7, 2023.
(5) Ms. Isabelle Parize, an independent director, resigned from her
mandate on June 30, 2023.
(6) On April 7, 2023, the Comité de Groupe Français appointed
Didier Dague as director representing Air France - KLM
employees (i) to replace Karim Belabbas for the duration of his
term of office (i.e. until the end of the Shareholders’ Meeting on
June 7, 2023), and (ii) from the end of the Shareholders’ Meeting
on June 7, 2023 until the end of the Shareholders’ Meeting in 2025
convened to approve the financial statements for the year ending
December 31, 2024.
(7) Mrs. May Gicquel was appointed on March 15, 2023 by
ministerial decree as director representing the French State,
replacing Mrs. Stephanie Besnier. A ministerial order was issued
on June 14, 2023, to renew her term of office for a period of four
years.
(8) On April 19, 2023, the Board of Directors co-opted CMA CGM
as a director to replace Mr. Saadé, for the unexpired term of his
predecessor. The Shareholders’ Meeting of June 7, 2023 ratified
the co-option of CMA CGM, represented by Mr. Ramon
Fernandez, as director for the unexpired term of his predecessor,
i.e. until the end of the Shareholders’ Meeting called to approve
the financial statements for the year ending December 31, 2025.
(9) Mr. Yann Leriche was appointed Director by the Air France-
KLM Shareholders' Meeting on June 7, 2023 for a 4-year period.
(10) On October 3, 2022, the Board of Directors co-opted Pascal
Bouchiat to replace Astrid Panosyan, on the recommendation of
the French State. The Shareholders’ Meeting of June 7, 2023
ratified the said cooptation and re-elected Pascal Bouchiat as
director for a four-year term, until the end of the Shareholders’
Meeting called to approve the financial statements for the year
ending December 31, 2026.
2
FIRST HALF YEAR ACTIVITY REPORT
Corporate Governance
18 Half Year Report 2023 ― Air France - KLM
8
Of which, on Board director appointed as proposed by the French State, one Board director appointed as proposed by the Dutch
State, one Board director appointed as proposed by Delta Air Lines Inc., one Board director appointed as proposed by China Eastern
Airlines and two Board directors representing the employee shareholders
9
In application of the provisions of Article 4 of Ordinance No. 2014-948 of August 20, 2014 on the governance and capital transactions of
publicly-held companies
10
In application of the provisions of Articles L. 22-10-7 and L. 225-27-1 of the Code de Commerce and Article 17-3 of the Articles of
Incorporation.
(11) The Shareholders’ Meeting of June 7, 2023 decided to
reappoint Mr. Cees 'T Hart as Director for a one-year term, until
the end of the Shareholders’ Meeting called to approve the
financial statements for the year ending December 31, 2023, in
accordance with Article 18 of the Company's bylaws as amended
by authorization of the Shareholders’ Meeting of June 7, 2023.
(12) Mr Terence Tilgenkamp's term of office as director
representing employees was reappointed by the Air France - KLM
European Works Council on April 4, 2023, to run from the end of
the Shareholders’ Meeting of June 7, 2023 until the end of the
Shareholders’ Meeting called to approve the financial statements
for the year ending December 31, 2024.
(13) The Shareholders’ Meeting of June 7, 2023 reappointed Mr.
Benjamin Smith as a Director for a four-year term, until the end of
the Shareholders’ Meeting to be called to approve the financial
statements for the year ending December 31, 2026.
FIRST HALF YEAR ACTIVITY REPORT
1
Corporate governance
Half Year Report 2023 ― Air France - KLM 19
Composition of the Board of Directors at June 30, 2023
Personal information
Board directors Gender Nationality Age Number of
shares held
Board directors appointed by the Shareholders’ Meeting
Anne-Marie Couderc Female French 73 4,000
Benjamin Smith Male Canadian 51 433,607
Gwenaëlle Avice-Huet Female French 43 3,501
Leni M.T. Boeren Female Dutch 59 16,000
Isabelle Bouillot Female French 74 1,020
Delta Air Lines, Inc. (Represented by Alain Bellemare
(1)
)
US 73,401,182
Cees’t Hart Male Dutch 64 3,500
Dirk van den Berg Male Dutch 69 4,000
Anne-Marie Idrac Female French 71 1,000
CMA CGM (Represented by Ramon Fernandez) French 231,348,252
Jian Wang Male Chinese 49 8,000
Alexander R. Wynaendts Male Dutch 62 1,000
Board directors appointed by the Shareholders’ Meeting as proposed by the State
Yann Leriche Male French 50 0
Pascal Bouchiat Male French 63 0
Board directors elected by the Shareholders’ Meeting representing the employee shareholders
François Robardet Male French 65 2,148
Michel Delli-zotti Male French 59 777
Board director representing the State appointed by ministerial decree
May Gicquel Female French 37 0
Board director representing the employees appointed by the Comité de Groupe Français
Didier Dague Male French 64
334
Board director representing the employees appointed by the European Works Council
Terence Tilgenkamp Male Dutch 40 0
2
FIRST HALF YEAR ACTIVITY REPORT
Corporate Governance
20 Half Year Report 2023 ― Air France - KLM
Experience Position within the Board Participation in Committees
Directorships
in listed
companies
Date
appointed
Expiry of term
of office
Board
experience
Audit
Committee
Remuneration
Committee
Appointments
& Governance
Committee
Sustainable
Development
& Compliance
Committee
2 19/05/2016 2024 AGM 7 years p (Chair)
1 05/12/2018 2027 AGM 4 year
2 26/05/2021 2025 AGM 2 years p
2 16/05/2017 2025 AGM 6 year p p
1 16/05/2013 2025 AGM 10 year p (Chair) p
1 03/10/2017 2025 AGM 5 year p
2 28/05/2019 2023 AGM 4 year
1 26/05/2020 2024 AGM 3 year p
3 02/11/2017 2025 AGM 5 year p (Chair)
0 19/04/2023 2026 AGM 2 months
1 30/07/2019 2025 AGM 3 year p
4 19/05/2016 2024 AGM 7 year p (Chair) p
1 07/06/2023 2027 AGM 1 month
1 03/10/2022 2027 AGM 8 months p
1 06/12/2016 2026 AGM 6 year p p
1 24/05/2022 2026 AGM 1 year p
1 15/03/2023 2027 AGM 3 months p p
0 07/04/2023 2025 AGM 2 months
1 01/12/2021 2025 AGM 1 year p
[1] Of which, one Board director appointed upon proposal of the
French State, one Board director appointed upon proposal of the
Dutch State, one Board director appointed upon proposal of Delta
Air Lines Inc., one Board director appointed upon proposal of
China Eastern Airlines and two Board directors representing the
employee shareholders.
[2] In application of the provisions of Article 4 of Ordinance No.
2014-948 of August 20, 2014 on the governance and capital
transactions of publicly-held companies.
[3] In application of the provisions of Articles L. 22-10-7 and L.
225-27-1 of the French Code de Commerce and Article 17-3 of the
Articles of Incorporation.
FIRST HALF YEAR ACTIVITY REPORT
1
Corporate governance
Half Year Report 2023 ― Air France - KLM 21
1.2.2 The CEO Committee
The CEO Committee is chaired by Mr. Benjamin Smith(1),
Chief Executive Officer of Air France-KLM, and has three
other members reporting directly to Mr. Smith:
– Ms. Anne Rigail, Chief Executive Officer of Air
France;
– Ms. Marjan Rintel, Chairman of the KLM
managment Board & Chief Executive Officer of
KLM, and
– Mr. Steven Zaat, Chief Financial Officer of Air
France-KLM.
The CEO Committee is responsible for defining the
strategic direction of all of the Group’s airlines and
operational entities.
1.2.3 The Group Executive Committee
Chaired by the Chief Executive Officer of Air France-KLM, the Group Executive Committee is composed of thirteen
members and a secretary.
Composition of the Group Executive Committee as of June 30, 2023:
Members at June 30, 2023 Age at
June 30,
2023
Relevant professional experience
Sector Experience
Benjamin Smith
Chief Executive Officer, Air France – KLM
51 years Air Transport 32 years
Marjan Rintel
Chairman of the managment board and Chief Executive
Officer, KLM
56 years Air Transport 23 years
Anne Rigail
Chief Executive Officer, Air France
54 years Air Transport 31 years
Steven Zaat
Chief Financial Officer, Air France – KLM
53 years Air Transport 21 years
Pieter Bootsma
Chief Strategic Officer, Air France – KL
53 years Air Transport 27 years
Alexandre Boissy
Corporate Secretary of Air France – KLM and Air France
46 years Air Transport 23 years
Anne Brachet
Executive Vice-President, Engineering & Maintenance, Air
France – KLM
59 years Air Transport 27 years
Oltion Carkaxhija
Executive Vice-President Transformation, Air France – KLM
47 years Air Transport 16 years
Angus Clarke
Chief Commercial Officer, Air France – KLM
48 years Air Transport 21 years
Adriaan den Heijer
Executive Vice-President Cargo, Air France – KLM
53 years Air Transport 28 years
Pierre-Olivier Bandet
(1)
Executive Vice-President Information Technology, Air France –
KLM
55 years Strategic
consulting,
Air Transport
4 years
26 years
Henri de Peyrelongue
Executive Vice-President Commercial Sales, Air France – KLM
57 years Air Transport 32 years
Constance Thio
EVP Human Ressources Air France – KLM
53 years Sustainability
Human Resources
Air Transport
3 years
8 years
25 years
(1) Mr. Pierre-Olivier Bandet has held office since January 1, 2023 in place of Jean-Christophe Lalanne.
Secretarial services to the Group Executive Committee are provided by the Air France-KLM Chief Executive Officer’s
Chief of Staff.
2
FIRST HALF YEAR ACTIVITY REPORT
Corporate Governance
22 Half Year Report 2023 ― Air France - KLM
1.2.4 Stock market and shareholder structure
Share capital
The shares are fully paid up and shareholders can opt to
hold them in either registered or bearer form. Since April
3, 2016, pursuant to law, shareholders holding their shares
in registered form for at least two years benefit from a
double voting right. There are no other specific rights
attached to the shares. Furthermore, there are no
securities not representing the share capital.
At June 30, 2023, the Air France-KLM share capital was
composed of 2,570,536,136 shares with a nominal value of
one euro:
Period ending on
Amount of capital
(in €) Number of shares
Number of
theoretical voting
rights
Number of
exercizable voting
rights
June 30, 2022 2,570,536,136 2,570,536,136 2,792,564,813 2,790,240,378
June 30, 2023 2,570,536,136 2,570,536,136 2,845,310,481 2,842,696,341
Shareholder structure
The following table shows the changes in the Company’s shareholder structure at June 30, 2023 relative to
December 31, 2022:
% of the capital
% of exercizable voting
rights
(1)
% of theoretical voting rights
(2)
June 30,
2023 Dec 31, 2022 June 30, 2023 Dec 31, 2022 June 30, 2023 Dec 31, 2022
Number of
shares or
voting rights 2,570,536,136 2,570,536,136 2,842,696,341 2,790,242,836 2,845,310,481 2,792,628,890
French State
28.6 % 28.6 % 29.0 % 28.5 % 29.0 % 28.5 %
Dutch State
9.3 % 9.3 % 10.6 % 10.8 % 10.5 % 10.7 %
CMA CGM
9.0 % 9.0 % 8.1 % 8.3 % 8.1 % 8.3 %
China
Eastern
Airlines
(3)
4.7 % 4.7 % 6.4 % 5.7 % 6.4 % 5.6 %
Delta Air
Lines, Inc.
(4)
2.9 % 2.9 % 3.9 % 4.0 % 3.9 % 4.0 %
Employees
(FCPE)
1.2 % 1.2 % 1.5 % 1.6 % 1.5 % 1.6 %
Treasury stock
(5)
0.1 % 0.1 % — % 0,0 % 0.1 % 0.1 %
Other
44.2 % 44.3 % 40.5 % 41.1 % 40.5 % 41.2 %
FIRST HALF YEAR ACTIVITY REPORT
1
Corporate governance
Half Year Report 2023 ― Air France - KLM 23
(1) The exercisable voting rights do not include the voting rights
on treasury shares or shares that have been stripped of their
voting rights given, notably, late notification of the crossing of
a threshold.
(2) The theoretical voting rights calculation takes into account all
of the voting rights including the double voting rights.
(3) Through Eastern Airlines Industry Investment (Luxembourg)
Company Limited.
(4) Acting in the capacity of general partner of the partnership
under Dutch law, DAL Foreign Holdings C.V. The company
Delta Air Lines, Inc. controls DAL Foreign Holdings C.V. and, as
general partner of DAL Foreign Holdings C.V. is the legal owner
of the Air France-KLM shares.
(5) Including 258,042 treasury shares held by Air France-KLM at
30 June 2023.
Stock market performance
Air France-KLM shares are listed for trading on the Paris and Amsterdam Stock Markets (Euronext Paris and
Amsterdam) under the ISIN code FR0000031122.
The stock is a component of the SBF 120. Since February 2008, Air France-KLM’s ADR program (American Depositary
Receipt) has been traded on the OTC Pink Marketplace under the ticker AFLYY. The Reuters code for the stock is
AIRF.PA or AIRF.AS and the Bloomberg code AF FP.
Pursuant to Article 222-1 of the Autorité des Marchés Financiers (AMF) General Regulation, since the registered office
for Air France-KLM is located in France, its Home Member State, within the meaning of Directive 2004/109/EC of
December 15, 2004, as amended (the Transparency Directive), is France. The AMF is consequently its competent
market authority as regards ensuring compliance with its regulated information obligations.
Over the first half 2023, the Air France-KLM stock price increased by 38%:
January-June 2023 January-June 2022
Share price high (in euros) 1.85 2.27
Share price low (in euros) 1.25 1.12
Number of shares in circulation 2,570,536,136 2,570,536,136
Market capitalization at the end of th eperiod (in billions of euros) 4.4 2.9
2
FIRST HALF YEAR ACTIVITY REPORT
Corporate Governance
24 Half Year Report 2023 ― Air France - KLM
2
FINANCIAL REPORT
2.1
Comments on the financial situation 26
2.1.1
Consolidated results for the first half ended June 30, 2023 26
2.1.2
Investments 29
2.1.3
Financing
30
2.1.4
Structure and profile of reimbursement of the financial debt 31
2.1.5
Main financial ratios of the Group 32
2.1.6
Consolidated equity at June 30, 2023 34
2.1.7
Air France-KLM parent company results 34
2.2
Consolidated financial statements 35
2.2.1
Consolidated income statement 35
2.2.2
Consolidated statement of recognized income and expenses 36
2.2.3
Consolidated balance sheet 37
2.2.4
Consolidated statement of changes in stockholders’ equity 39
2.2.5
Consolidated statement of cash flows 40
2.3 Notes to the consolidated financial
statements
42
Half Year Report 2023 ― Air France - KLM 25
2.1
COMMENTS ON THE FINANCIAL SITUATION
(UNAUDITED)
2.1.1 Consolidated results for the first half ended June 30, 2023
Scope at June 30, 2023
At June 30, 2023, the consolidation scope was composed
of 85 fully consolidated companies, 21 companies
consolidated using the equity method and one joint-
venture. Air France – KLM and its two main subsidiaries,
Air France and KLM, represent 91% of revenues and 65%
of the balance sheet. The other subsidiaries are
principally involved in air transportation (Hop!, KLM
Cityhopper), maintenance and low-cost transportation
(Transavia).
(in € million) June 30, 2023 June 30, 2022 Change
Sales 13,953 11,152 2,801
EBITDA 1,614 1,152 462
Income from current operations 426 36 390
Income from operating activities 469 60 409
Net income for the period 275 (226) 501
Net income/(loss), Group part 260 (228) 488
Basic earnings/(loss) per share, Group (in €) 0.05 (0.42) 0.47
Revenues
Consolidated revenues for the period amounted to
€14.0 billion, an increase of 25.1% and 24.8% on a constant
currency basis compared to first semester 2022.
Air France–KLM increased its overall capacity by 13.5%
(ASK - available seat-kilometer). The 2023 first half was
characterized by a 10.9% increase in unit revenues on a
constant currency basis, due to the combined
performances of the passenger (22.4%) and cargo (-38.3%)
transportation activities, both these activities being
included in the Network business, and the performance
of Transavia (7.6%). In addition, Air France–KLM increased
its passenger capacity by 12.6% (ASK) and its cargo
capacity by 8.4% (ATK). Transavia’s capacity increase
stood at 19.5% (ASK). Revenues from the Network
business increased by 25.3%. Maintenance revenues
increased by 13.7%, while third-party maintenance
revenues increased by 17.4% (14.3% on a constant currency
basis). Transavia revenues increased by 28.2%.
Operating expenses
Operating expenses increased by 21.7% to €13.5 billion,
while capacity (ASK) increased by 13.5% compared to first
semester 2022.
External expenses increased by 21.7% to €8.6 billion
versus €7.1 billion over the previous half.
Excluding fuel, external expenses were up by 21.4%
relative to first semester 2022.
The breakdown of external expenses was as follows:
2
Financial report
Comments on the financial situation
26 Half Year Report 2023 ― Air France - KLM
(in € million) June 30, 2023 June 30, 2022 % ch.
% ch. at constant
currency
restated (*)
Aircraft fuel 3,523 2,885 22.1 % 20.2 %
Chartering costs 243 193 25.9 % 25.0 %
Landing fees and air route charges 919 784 17.2 % 17.5 %
Catering 393 319 23.2 % 23.0 %
Handling charges and other operating
costs 894 722 23.8 % 24.1 %
Aircraft maintenance costs 1,245 1,118 11.4 % 9.1 %
Commercial and distribution costs 516 384 34.4 % 33.9 %
Other external expenses 916 702 30.5 % 30.5 %
Total 8,649 7,107 21.7 % 20.5 %
* Restated figures include the change in accounting principles for CO2 quotas, please refer to Note 2 of the notes to the consolidated
financial statements.
The main changes were as follows:
― aircraft fuel (including CO
2
quotas): the fuel
expense for the first half year increased by 22.1%, mainly
due to higher capacity (ASK 13.5%), dollar appreciation
and change in fuel hedge results compared to last year
that had a negative effect of €712 million;
― chartering costs: the costs incurred in leasing
aircraft capacity from other airlines. Their increase in 2023
(+25.9%) resulted in a higher increase than the Group’s
overall capacity increase;
― landing fees and en-route charges: these costs
are incurred for air navigation services and the use of
airports and their increase relative to last year (+17.2%)
was slightly above the capacity growth (ASK 13.5%)
following increases in airport and air navigation tariffs;
― catering costs: these costs comprise the services
supplied on board the Air France – KLM Group’s own
aircraft. They increased by 23.2% compared to last year,
when in-flight catering on board had been considerably
reduced due to the Covid-19 health measures and also
due to higher capacity and food inflation;
― handling charges and other operating costs:
principally cover aircraft handling on the ground and the
cost of passenger care for the Group and, to a lesser
extent, third-party customers. The increase in these costs
(+23.8%) is mainly explained by the increase in capacity
and by inflationary pressures;
― aircraft maintenance costs: they include
maintenance procurement and consumption for the
Group’s aircraft and for the third-party activity; their
increase is linked to the increase in internal and third-
party activities;
― commercial and distribution costs: these costs
increased by 34.4%, significantly more than capacity
due to a base effect as marketing costs had been
extremely limited in 2022 within the context of the
Covid-19;
― other external expenses principally comprise rental
charges, telecommunications costs, insurance and
fees. Their level, increased by more than capacity
thanks to inflationary pressures.
Salaries and related costs were up by 24.6% to €4.2 billion
versus €3.3 billion in 2022. This was largely explained by
the decrease in Long-Term Partial Activity (“APLD”) in
France and the end of the NOW program in the
Netherlands in the first quarter of 2022, whose total
contribution was reduced from €254 million in H1 2022 to
no more furlough received in H1 2023. In addition, salary
costs increased due to higher activity and the new
collective labor agreements negotiated in the context of
high inflation.
Taxes other than income taxes stood at €93 million in the
first half of 2023 versus €80 million in 2022, up by 16.3%.
Other current income and expenses stood at net income
of €567 million in the first half of 2023 versus a net
income of €530 million in 2022. They included:
― capitalized production amounting to €534 million in
2023 versus €500 million in 2022;
― a result from joint-ventures of €(21) million in 2023
versus an income of €1 million in 2022;
― €45 million income from currency hedges in 2023
versus €37 million in 2022.
EBITDA
EBITDA amounted to €1,614 million (versus €1,152 million at June 30, 2022).
The contributions to EBITDA by business segment were as follows:
Financial report
2
Comments on the financial situation
Half Year Report 2023 ― Air France - KLM 27
(in € million) June 30, 2023 June 30, 2022 % ch.
Network 1,482 943 57.2 %
Maintenance 188 196 (4.1) %
Transavia (61) 1 na
Other 5 12 (58.3) %
Total 1,614 1,152 40.1 %
Amortization, depreciation and provisions
Amortization, depreciation and provisions totaled
€1,188 million in 2023 versus €1,116 million in 2022.
Without calling into question the objective of reaching
64% of new-generation aircraft in the fleet by 2028, the
Group has decided to extend the amortization period for
its Boeing B777-300 fleet from 20 to 25 years, generating
a reduction in amortization expense of €41 million over
the period ended June 30, 2023.
Income/(loss) from current operations
The result from current operations was positive to the
tune of €426 million (versus €36 million at June 30, 2022).
The contributions to revenues and income/(loss) from
current operations by business segment were as follows:
(in € million)
June 30, 2023 June 30, 2022
External sales
Income from
current operations External sales
Income from
current operations
Network 12,095 542 9,647 43
Maintenance 753 62 642 101
Transavia 1,089 (172) 850 (110)
Other 16 (6) 13 2
Total 13,953 426 11,152 36
The nominal unit cost per ASK increased by 7.8%. In
addition, there was a 0.5% increase on currency variation
and a fuel price increase of 1.4%. Together this amounted
to an unit cost at constant currency and constant fuel
price of 5.9%.
Income/(loss) from operating activities
The result from operating activities amounted to €469
million in the first half of 2023 versus €60 million in 2022.
Over the first half of 2023, the result from operating
activities included, notably:
― the impact of aircraft sales and leasebacks for €6
million;
― a €20 million gain resulting from a refinancing of a
B777 (KLM);
― a €11 million gain resulting from the disposal of
Heathrow slots to Virgin Atlantic;
― a €10 million gain resulting from the disposal of a
Data Center by KLM.
In the first half of 2022, the result from operating
activities had included, notably:
― a €39 million gain on the sale of aircraft equipment;
― a €(17) million loss linked to impairments on fleet and
other assets.
These operations are detailed in Note 11 “Sales of aircraft
equipment and other non-current income and expenses”
in the Notes to the consolidated financial statements.
Net cost of financial debt
The net cost of financial debt decreased to €(188) million
versus a net cost of €(277) in the previous half. As of June
30, 2023 and in the context of the full repayment of the
state guaranteed loan, it includes a €10 million income
consisting of an expense of €(96) million related to the
guarantee contractually due and an income of
€106 million, related to the application of the amortized
cost at the effective interest rate methodology.
Other financial income and expenses
Other net financial income and expenses amounted to
€14 million in 2023 versus €(286) million in 2022 and
corresponded mainly to foreign exchange gain of €112
million in 2023 versus a €(236) million loss in 2022. In
addition, it includes as well the impact of the rate used to
discount the long term return obligation liability and
provision for leased aircraft.
Net result – Group part
Income taxes stood at income of €(21) million in 2023
versus €278 million in 2022 mainly due to the recognition
of deferred tax assets for the Dutch tax group in the first
half of 2022.
Share of profits/(losses) from associates contributed a
gain of €1 million in 2023 versus a €(1) million loss in the
previous half. This was principally the result from the
Servair Group and from partnerships in the maintenance
business.
2
Financial report
Comments on the financial situation
28 Half Year Report 2023 ― Air France - KLM
The net result, Group part stood at income of €260
million as of June 30, 2023 versus a €(228) million loss as
of June 30, 2022
The contributions to the net result by quarter were,
respectively, €(344) million at March 31, 2023, €604
million at June 30, 2023.
Basic earnings per share, Group part amounted to €0.05
at June 30, 2023 versus €(0.42) at June 30, 2022.
2.1.2 Investments
(in € million) June 30, 2023 June 30, 2022
restated (*)
Acquisition of intangible assets (76) (72)
Investment in flight equipment (1,215) (1,326)
Acquisition of other tangible assets (88) (51)
Change in accounts payable on acquisitions (17) (8)
Acquisition of subsidiaries, of shares in non-controlled entities (2) —
Proceeds on disposal of property plant and equipment and intangible assets 211 476
Dividends received 2 1
Decrease (increase) in net investments, more than 3 months (52) 6
Net cash flow used in investing activities (1,237) (974)
* Restated figures include the change in accounting principles for CO2 quotas, please refer to Note 2 of the notes to the consolidated
financial statements.
Investment in flight equipment included advance
payments and balances on the delivery of aircraft
purchases, capitalized aircraft modifications, spare parts
procurement and maintenance costs eligible for
capitalization. Investment in intangible assets related to
the purchase of software and capitalized IT development.
Other investments in tangible assets mostly included the
acquisition of industrial equipment for the flight
operations, maintenance and IT.
During the 2023 first half, the Air France - KLM Group’s
capital expenditure on tangible and intangible assets
amounted to €(1,396) million and proceeds on disposals
to €211 million.
Financial report
2
Comments on the financial situation
Half Year Report 2023 ― Air France - KLM 29
2.1.3 Financing
(in € million) June 30, 2023 June 30, 2022
Increase of equity — 1,551
Payments to acquire treasury shares (1) —
Issuance of perpetual 728 —
Repayment on perpetual (595) (993)
Coupons on perpetual (52) (229)
Issuance of debt 1,558 552
Repayment on debt (2,969) (1,415)
Payments on lease debts (421) (442)
New loans (306) (175)
Repayment on loans 104 16
Dividends paid (90) —
Net cash flow from financing activities (2,044) (1,135)
Evolution of perpetual subordinated bonds owned
by the French State
Respectively, on March 17, 2023 and April 19, 2023, Air
France- KLM has repaid the full amount of the
outstanding French State perpetual bonds, under the
terms of temporary framework related to Covid-19 aid,
for €320 million and €317 million (including accrued
coupons).
In parallel, the Group has refinanced €320 million on
March 17, 2023 and €407 million on April 19, 2023 through
the issuances of new French State perpetual hybrid
bonds as an approved compensation aid to Air France for
damages incurred as a result of Covid-19 between March
17 and June 30, 2020. These new perpetual bonds with no
“bans” attached contain similar financial conditions as the
ones repaid at the same date, with non-call date and
interest rate step-up postponed by an additional two
years (March 2029).
In this context, the Group paid a €90 million
compensation to the French State required for the shares
subscribed in April 2021.This payment was considered as
a dividend payment accordingly to IFRS principles.
Sustainability-linked bonds, for a total amount of
€1 billion
On January 9, 2023, Air France-KLM has placed its first
sustainability-linked bonds, for a nominal amount of €1
billion, linked to the Company’s target to reduce its jet
fuel greenhouse gas (GHG) emissions per revenue tonne
kilometer (RTK) by 10% by 2025, compared to a 2019
baseline, as part of its 2030 SBTi approved objective.
Early repayment of €2.5 billion of the bank loan
guaranteed by the French State (“PGE”)
On March 15, 2023, Air France-KLM has fully repaid the
remaining €2.5 billion from its initial €4 billion Bank loan
guaranteed by the French State, granted during the
Covid-19 crisis.
To do so, the Group used the proceeds of €1 billion from
Sustainability-linked bonds issued and €1.5 billion
available cash.
At June 30, 2023, the Group’s net liquidity position
amounted to €7.8 billion, including €624 million of
investments with maturities of above three months and
€987 million of bonds. In addition, the Group had credit
facilities of €2.3 billion available at June 30, 2023.
Net debt stood at €4.9 billion (€6.3 billion as of
December 31, 2022). The detailed net debt calculation can
be found in Note 23 in the Notes to the consolidated
financial statements).
2
Financial report
Comments on the financial situation
30 Half Year Report 2023 ― Air France - KLM
2.1.4
Structure and profile of reimbursement of the financial
debt
Structure of the financial debt
The Group’s gross debt stood at €8.9 billion at June 30, 2023. The structure of the debt is as follows:
― market financing (bonds and perpetual subordinated loan stock): €2.7 billion;
― financial lease debt with bargain option: €3.7 billion;
― sustainability-linked bonds: €1.0 billion;
― other borrowings including bank debt and accrued interest: €1.5 billion.
Reimbursement profile for debt and subordinated securities, excluding lease debt and KLM perpetuals
(1) Excluding operating lease debt payments, KLM perpetual debt, and Air France perpetual quasi-equity.
Financial report
2
Comments on the financial situation
Half Year Report 2023 ― Air France - KLM 31
2.1.5 Main financial ratios of the Group
Financial cover ratios
Net debt/EBITDA ratio June 30, 2023 December 31, 2022
Net debt 4,900 6,337
EBITDA 4,077 3,615
Net debt/EBITDA* 1.20 1.75
*Trailing 12 months EBITDA
EBITDA/net cost of financial debt ratio June 30, 2023 December 31, 2022
EBITDA 1,614 3,615
Net cost of financial debt 188 528
EBITDA/net cost of financial debt 8.59 6.85
Return on Capital Employed (ROCE)
Return on capital employed measures the return on
invested capital by expressing a result after tax as a
percentage of capital employed. The calculation
methodology is as follows:
― the calculation of the capital employed is based on
an additive method by identifying the relevant
balance sheet items. The capital employed for the
year is obtained by taking the average of the capital
employed on every quarterly balance sheet;
― the adjusted result after tax corresponds to the sum
of the operating result adjusted for dividends
received and the share of profits/(losses) of
associates.
(in € million) June 30, 2023
March 31,
2023
December 31,
2022
September
30, 2022
restated (*) restated (*)
Goodwill and intangible assets 1,339 1,351 1,352 1,350
Flight equipment 10,957 10,954 10,614 10,298
Other property, plant and equipment 1,389 1,372 1,375 1,349
Right-of-use assets 5,480 5,304 5,428 5,536
Investments in equity associates 121 122 120 111
Other financial assets excluding shares available for sale,
marketable securities and financial deposits 190 169 169 164
Provisions excluding pension, cargo litigation and
restructuring (4,248) (4,255) (4,347) (4,792)
Working capital (11,467) (11,313) (9,882) (10,359)
Capital employed 3,761 3,704 4,829 3,657
Average capital employed (A) 3,988
Income (losses) from current operations 1,584
Dividends received (2)
Share of profits/(losses) of associates 15
Normative income tax (412)
Adjusted result from current operations after tax (B) 1,185
ROCE (B/A) 29.7%
2
Financial report
Comments on the financial situation
32 Half Year Report 2023 ― Air France - KLM
* Restated figures include the change in accounting principles for CO2 quotas, please refer to Note 2 of the notes to the consolidated
financial statements.
(in € million)
June 30,
2022
March 31,
2022
December
31, 2021
September
30, 2021
restated (*) restated (*) restated (*) restated (*)
Goodwill and intangible assets 1 361 1 363 1 380 1 384
Flight equipment 10 521 10 537 10 466 10 478
Other property, plant and equipment 1 358 1 378 1 402 1 418
Right-of-use assets 5 439 5 205 5 148 5 061
Investments in equity associates 108 107 109 172
Other financial assets excluding shares available for sale,
marketable securities and financial deposits 162 158 157 147
Provisions excluding pension, cargo litigation and restructuring (4 473) (4 240) (4 180) (4 180)
WCR (11 080) (9 480) (8 185) (7 923)
Capital employed 3 396 5 028 6 297 6 557
Average capital employed (A) 5,320
Adjusted result from current operations 344
Dividends received –
Share of profits/(losses) of associates (12)
Normative income tax (80)
Adjusted result from current operations after tax (B) 252
ROCE (B/A) 4,7%
* Restated figures include the change in accounting principles for CO2 quotas, please refer to Note 2 of the notes to the consolidated
financial statements.
Net cost per ASK
To analyze the cost performance of each transportation
activity, the Group divides the net cost of this activity by
the capacity produced, expressed in ASK for the
passenger business and Transavia, and in ATK for the
cargo business. To analyze the company’s overall cost
performance, the Group uses the net cost per ASK. This
net cost is obtained by dividing the total net cost by the
capacity produced expressed in available seat-kilometers
(ASK).
The net cost is calculated by subtracting the revenues
other than those generated by the three transportation
activities (passenger, cargo and Transavia) from total
operating expenses. The capacity produced by the two
passenger transportation activities is combined by
adding the capacity of the passenger business (in ASK) to
that of Transavia (in ASK).
Financial report
2
Comments on the financial situation
Half Year Report 2023 ― Air France - KLM 33
June 30, 2023 June 30, 2022
Revenues (in €m) A 13,953 11,152
Income/(loss) from current operations (in €m) B 426 36
Total operating expense (in €m) C=A-B 13,527 11,116
Network business – other network revenues (in €m) D 510 439
Third-party revenues in maintenance (in €m) E 753 642
Transavia – other revenues (in €m) F (21) (12)
Other businesses (in €m) G 15 13
Net costs (in €m)
H=C-D-
E-F-G
12,270 10,034
Capacity produced, reported in ASK 147,727 130,192
Net cost per ASK (in € cents) 8.31 7,71
Gross change 7,8%
Currency effect on net costs (in €m) 43
Change at constant currencies 7,3%
Fuel price effect (in €m) 134
Change on a constant currency and fuel price basis 5,9%
Net cost per ASK on a constant currency and fuel price basis (in € cents) 8.31 7.84
2.1.6 Consolidated equity at June 30, 2023
Consolidated Equity amounted to €(2,231) million as of
June 30, 2023 versus €(2,480) million as of December 31,
2022. The €0.2 billion increase is mainly explained by the
net result of the period.
Respectively, on March 17, 2023 and April 19, 2023, Air
France-KLM has repaid the full amount of the
outstanding French State perpetual bonds, under the
terms of temporary framework related to Covid-19 aid,
for €320 million and €317 million (including accrued
coupons).
The Group has also paid the required compensation of
the French State for the shares subscribed in April 2021,
for an amount of €90 million.
In parallel, the Group has refinanced €320 million on
March 17, 2023 and €407 million on April 19, 2023 through
the issuances of new French State perpetual hybrid
bonds as an approved compensation aid to Air France for
damages incurred as a result of Covid-19 between March
17 and June 30, 2020.
Consequently, those operation had no impact on the
total consolidated equity as of June 30, 2023.
2.1.7 Air France-KLM parent company results
As a holding company, Air France – KLM has no operating
activity. Its revenues comprise royalties paid by the two
operating subsidiaries for use of the Air France – KLM logo
and the supply of services invoiced to Air France and
KLM. Its expenses mostly comprise financial
communication expenses, Statutory Auditors’ fees, the
expenses linked to the compensation of the company
officers and the staff made available by Air France and
KLM.
At June 30, 2023, the operating result amounted to a loss
of €(7) million (versus a loss of €(6) million in 2022).
The net result was a €4 million income, mainly due to
financial income on marketable securities, unrealized
foreign exchange gains and tax income.
2
Financial report
Comments on the financial situation
34 Half Year Report 2023 ― Air France - KLM
2.2 CONSOLIDATED FINANCIAL STATEMENTS
2.2.1 Consolidated income statement
Period from January 1 to June 30 Notes 2023 2022
(in € million) restated ⁽¹⁾
Revenues from ordinary activities 13,953 11,152
External expenses 7 (8,649) (7,107)
Salaries and related costs 8 (4,164) (3,343)
Taxes other than income taxes (93) (80)
Other current operating income and expenses 9 567 530
EBITDA 1,614 1,152
Amortization, depreciation and provisions 10 (1,188) (1,116)
Income from current operations 426 36
Sales of aircraft equipment 11 28 39
Other non-current income and expenses 11 15 (15)
Income from operating activities 469 60
Cost of financial debt 12 (296) (277)
Income from cash and cash equivalents 12 108 —
Net cost of financial debt 12 (188) (277)
Other financial income and expenses 12 14 (286)
Income before tax 295 (503)
Income taxes 13.1 (21) 278
Net income of consolidated companies 274 (225)
Share of profits (losses) of associates 1 (1)
Net income for the period 275 (226)
Non-controlling interests 15 2
Net income - Group part 260 (228)
Earnings per share – Equity holders of Air France-KLM (in euros)
- basic
14 0.05 (0.42)
- diluted
14 0.05 (0.42)
(1)
See Note 2 in Notes to the consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 35
2.2.2 Consolidated statement of recognized income and
expenses
Period from January 1 to June 30 Notes 2023 2022
(in € million)
Net income for the period 275 (226)
Cash flow hedges and cost of hedging
Effective portion of changes in fair value hedge and cost of hedging
recognized directly in other comprehensive income (118) 823
Change in fair value and cost of hedging transferred to profit or loss 37 (647)
Exchange difference resulting from the translation 1 8
Deferred tax on items of comprehensive income that will be reclassified to
profit or loss 13.2 21 (48)
Total of other comprehensive income that will be reclassified to profit or loss (59) 136
Remeasurements of defined benefit pension plans 20 51 415
Fair value of equity instruments revalued through OCI 3 (4)
Deferred tax on items of comprehensive income that will not be reclassified
to profit or loss 13.2 (11) (21)
Total of other comprehensive income that will not be reclassified to profit or
loss 43 390
Total of other comprehensive income, after tax (16) 526
Recognized income and expenses 259 300
― Equity holders of Air France – KLM 244 298
― Non-controlling interests 15 2
The accompanying notes are an integral part of these consolidated financial statements.
2
Financial report
Consolidated financial statements
36 Half Year Report 2023 ― Air France - KLM
2.2.3 Consolidated balance sheet
Assets Notes June 30, 2023 December 31,
2022
(in € million) restated ⁽¹⁾
Goodwill 225 225
Intangible assets 1,114 1,127
Flight equipment 15 10,957 10,614
Other property, plant and equipment 15 1,389 1,375
Right-of-use assets 17 5,480 5,428
Investments in equity associates 121 120
Pension assets 20 83 39
Other non-current financial assets 1,443 1,184
Non-current derivative financial assets 159 262
Deferred tax assets 13 714 714
Other non-current assets 76 78
Total non-current assets 21,761 21,166
Other current financial assets 621 620
Current derivative financial assets 214 327
Inventories 754 723
Trade receivables 1,983 1,785
Other current assets 1,132 979
Cash and cash equivalents 18 6,169 6,626
Assets held for sale 82 79
Total current assets 10,955 11,139
Total assets 32,716 32,305
(1)
See Note 2 in Notes to the consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 37
Consolidated balance sheet (continuation)
Liabilities and equity Notes June 30, 2023
December 31,
2022
(in € million)
Issued capital 19.1 2,571 2,571
Additional paid-in capital 5,217 5,217
Treasury shares (25) (25)
Perpetual 19.2 1,048 933
Reserves and retained earnings (11,582) (11,700)
Equity attributable to equity holders of Air France-KLM (2,771) (3,004)
Perpetual 19.2 524 510
Reserves and retained earnings 16 14
Equity attributable Non-controlling interests 540 524
Total equity (2,231) (2,480)
Pension provisions 20 1,661 1,634
Non-current return obligation liabilities and provisions for leased aircrafts and
other provisions 21 3,885 4,149
Non-current financial liabilities 22 8,225 9,657
Non-current lease debt 17 3,227 3,318
Non-current derivative financial liabilities 39 21
Deferred tax liabilities 13 9 1
Other non-current liabilities 24 1,696 2,343
Total non-current liabilities 18,742 21,123
Current return obligation liabilities and provisions for leased aircrafts and
other provisions 21 847 740
Current financial liabilities 22 675 896
Current lease debt 17 819 834
Current derivative financial liabilities 143 83
Trade payables 2,576 2,424
Deferred revenue on ticket sales 5,500 3,725
Frequent flyer programs 884 900
Other current liabilities 24 4,755 4,057
Bank overdrafts 18 6 3
Total current liabilities 16,205 13,662
Total liabilities 34,947 34,785
Total equity and liabilities 32,716 32,305
The accompanying notes are an integral part of these consolidated financial statements.
2
Financial report
Consolidated financial statements
38 Half Year Report 2023 ― Air France - KLM
2.2.4 Consolidated statement of changes in stockholders’ equity
Attributable to equity holders of Air France-KLM Non-controlling interests Total
(in € million)
Number of
shares
Issued
capital
Additio-
nal paid-
in capital
Treasury
shares
Perpetu-
al bonds
Reserves
and
retained
earnings Equity
Perpetu-
al bonds
Reserves
and
retained
earnings Equity Equity
December 31, 2021 642,634,034 643 4,949 (25) 3,151 (12,542) (3,824) – 8 8 (3,816)
Other
comprehensive
income – – – – 526 526 – – – 526
Net result for the
period – – – – (228) (228) – 2 2 (226)
Total of income and
expenses
recognized – – – – 298 298 – 2 2 300
Capital increase 1,927,902,102 1,928 268 – – – 2,196 – – – 2,196
Perpetual – – – (1,631) – (1,631) – – – (1,631)
Coupons on
perpetual – – – (131) (105) (236) – – – (236)
June 30, 2022 2,570,536,136 2,571 5,217 (25) 1,389 (12,349) (3,197) – 10 10 (3,187)
December 31, 2022 2,570,536,136 2,571 5,217 (25) 933 (11,700) (3,004) 510 14 524 (2,480)
Other
comprehensive
income – – – – (16) (16) – – – (16)
Net result for the
period – – – – 260 260 – 15 15 275
Total of income and
expenses
recognized – – – – 244 244 – 15 15 259
Purchase of Treasury
Shares – – (1) – – (1) – – – (1)
Share based
payments – – 1 – (1) – – – – –
Perpetual bonds – – – 133 – 133 – – – 133
Coupons on
perpetual – – – (18) (34) (52) 14 (14) – (52)
Dividends paid ⁽¹⁾ – – – – (90) (90) – – – (90)
Other – – – – (1) (1) – 1 1 –
June 30, 2023 2,570,536,136 2,571 5,217 (25) 1,048 (11,582) (2,771) 524 16 540 (2,231)
(1)
During the first half of 2023 and in the context of the exit of the French Recapitalization State Aid under the EU Covid-19 Temporary
Framework, the Group paid a €90 million compensation to the French State required for the shares subscribed in April 2021.This
payment was considered as a dividend payment and was therefore recognized in equity accordingly to IFRS principles.
The accompanying notes are an integral part of these consolidated financial statements.
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 39
2.2.5 Consolidated statement of cash flows
Period from January 1 to June 30 Notes 2023 2022
(in € million) restated ⁽¹⁾
Net income 275 (226)
Amortization, depreciation and operating provisions 10 1,188 1,116
Financial provisions 12 100 69
Loss (gain) on disposals of tangible and intangible assets (49) (40)
Derivatives – non monetary result (5) (20)
Unrealized foreign exchange gains and losses, net (73) 240
Share of (profits) losses of associates (1) 1
Deferred taxes 13 19 (282)
Impairment 2 17
Other non-monetary items (152) (117)
Financial capacity 1,304 758
(Increase) / decrease in inventories (33) (79)
(Increase) / decrease in trade receivables (167) (437)
Increase / (decrease) in trade payables 115 971
Increase / (decrease) in advanced ticket sales 1,757 2,276
Change in other assets and liabilities (130) 97
Change in working capital requirement 1,542 2,828
Net cash flow from operating activities 2,846 3,586
Acquisition of subsidiaries, of shares in non-controlled entities (2) –
Purchase of property plant and equipment and intangible assets 16 (1,396) (1,457)
Proceeds on disposal of property plant and equipment and intangible assets 11 211 476
Dividends received 2 1
Decrease (increase) in net investments, more than 3 months (52) 6
Net cash flow used in investing activities (1,237) (974)
Increase of equity 19.1 – 1,551
Payments to acquire treasury shares (1) –
Issuance of perpetual 19.2 728 –
Repayment on perpetual 19.2 (595) (993)
Coupons on perpetual 19.2 (52) (229)
Issuance of debt 22 1,558 552
Repayment on debt 22 (2,969) (1,415)
Payments on lease debts (421) (442)
New loans (306) (175)
Repayment on loans 104 16
Dividends paid (90) –
Net cash flow from financing activities (2,044) (1,135)
Effect of exchange rate on cash and cash equivalents and bank overdrafts (net
of cash acquired or sold)
(25) 40
Change in cash and cash equivalents and bank overdrafts (460) 1,517
Cash and cash equivalents and bank overdrafts at beginning of period 18 6,623 6,654
Cash and cash equivalents and bank overdrafts at end of period 18 6,163 8,171
Income tax (paid) / reimbursed (flow included in operating activities) (61) 50
Interest paid (flow included in operating activities) (475) (291)
Interest received (flow included in operating activities) 91 (8)
(1)
See Note 2 in Notes to the consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
2
Financial report
Consolidated financial statements
40 Half Year Report 2023 ― Air France - KLM
2.2.6 Operating free cash flow
Period from January 1 to June 30 Notes 2023 2022
(in € million) restated ⁽¹⁾
Net cash flow from operating activities 2,846 3,586
Purchase of property plant and equipment and intangible assets 16 (1,396) (1,457)
Proceeds on disposal of property plant and equipment and intangible assets 211 476
Operating free cash flow 23 1,661 2,605
Payments on lease debts (421) (442)
Operating free cash flow adjusted 1,240 2,163
(1)
See Note 2 in Notes to the consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 41
2.3 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Business description 43
Note 2 Restatement of the 2022 financial statements 43
Note 3 Significant events 44
Note 4 Accounting policies 46
Note 5 Change in the consolidation scope 47
Note 6 Information by activity and geographical area 47
Note 7 External expenses 50
Note 8 Salaries and number of employees 51
Note 9 Other current operating income and expenses 52
Note 10 Amortization, depreciation and provisions 52
Note 11 Sales of aircraft equipment and other non-current income and expenses 53
Note 12 Net cost of financial debt and other financial income and expenses 54
Note 13 Income taxes 55
Note 14 Earnings per share 56
Note 15 Tangible assets 57
Note 16 Capital expenditures 58
Note 17 Right-of-use assets and lease debt 58
Note 18 Cash, cash equivalents and bank overdrafts 59
Note 19 Equity attributable to equity holders of Air France - KLM SA 59
Note 20 Retirement benefits and pension assets 60
Note 21 Return obligation liability and provision for leased aircraft and other provisions 61
Note 22 Financial liabilities 64
Note 23 Net debt 65
Note 24 Other liabilities 66
Note 25 Flight equipment orders 66
Note 26 Related parties 67
2
Financial report
Consolidated financial statements
42 Half Year Report 2023 ― Air France - KLM
NOTE 1 BUSINESS DESCRIPTION
As used herein, the term “Air France–KLM” refers to
Air France–KLM SA, a limited liability company organized
under French law. The term “Group” is represented by the
economic definition of Air France–KLM and its
subsidiaries. The Group is headquartered in France and is
one of the largest airlines in the world.
The Group’s core business is network activities which
includes passenger transportation on scheduled flights
and cargo activities. The Group’s activities also include
aeronautics maintenance, leisure passenger
transportation (Transavia) and other air-transport-related
activities.
The limited company Air France–KLM, domiciled at 7, rue
du cirque 75008 Paris – France, is the parent company of
the Air France–KLM Group. Air France–KLM is listed for
trading in Paris (Euronext) and Amsterdam (Euronext).
The presentation currency used in the Group’s financial
statements is the Euro, which is also Air France–KLM’s
functional currency.
NOTE 2 RESTATEMENT OF THE 2022 FINANCIAL STATEMENTS
Since January 1, 2012, airlines have been subject to the
Emission Trading Scheme (ETS) regulations for all flights
to or from the European Economic Area.
Additionally, since January 1, 2020, Air France has been
compensating all the CO
2
emissions of its customers on
the French domestic routes.
Until December 31, 2022 and as described in Note 4.23
“Emission Trading Scheme” of the notes to the 2022
consolidated financial statements, the Group recognized
for the CO
2
emissions compensation scheme:
• on the assets side, free CO
2
quotas allocated by
the State and the ones purchased on the market
to compensate emissions as unamortized
intangible assets. Their acquisition was disclosed
in the investing activities of the consolidated
cash flow statement;
• in the income statement, an expense to cover its
obligation to surrender rights corresponding to
its emissions of the period within the “Other
current operating income and expenses” of the
consolidated income statement. This non-
monetary expense was restated under within
the “other non-monetary items” in the cash flow
statement without impacting operating cash
flows;
• on the liabilities side, a provision to cover the
cost of quotas to be surrendered in respect of
emissions made at the closing date.
As from January 1, 2023 and in the absence of IFRS
standards or interpretations governing ETS accounting
and considering CO
2
quotas as an operating expense
linked to fuel expenses, the Group considers that the
operating cash flow is the most representative of this
outflow. The Group therefore decided to adjust its
accounting treatment as described below:
• free CO
2
quotas allocated by the State and the
ones purchased on the market recognized as
intangible assets will now be disclosed in the
line “other assets” of the consolidated balance
sheet and as an operating cash flow in the
consolidated cash flow statement;
• the expense corresponding to the obligation to
surrender quotas of the period will be integrated
in the “external expenses” of the consolidated
income statement;
• the obligation to surrender rights valued at
acquisition cost for acquired rights - including
free quotas - and at market price for rights not
yet acquired remains a provision on the liability
side.
This change has been applied retrospectively to the
financial information disclosed in the prior periods in
accordance with IAS 8 “Accounting Policies, Changes in
Accounting Estimates and Errors”.
The impacts on the comparative periods for the impacted
items of the primary financial statements are presented
below:
Impact on the consolidated income statement
Period from January 1 to June 30, 2022
(in € million)
Published
accounts
Change in
accounting
treatment
Restated
accounts
External expenses (7,080) (27) (7,107)
Other current operating income and expenses 503 27 530
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 43
Impact on the consolidated statement of cash flows
Period from January 1 to June 30, 2022
(in € million)
Published
accounts
Change in
accounting
treatment
Restated
accounts
Other non-monetary items (90) (27) (117)
Change in other assets and liabilities 104 (7) 97
Net cash flow from operating activities 3,620 (34) 3,586
Purchase of property plant and equipment and intangible assets (1,491) 34 (1,457)
Net cash flow used in investing activities (1,008) 34 (974)
Impact on the consolidated balance sheet
Balance sheet as of December 31, 2022
(in € million)
Published
accounts
Change in
accounting
treatment
Restated
accounts
Intangible assets 1,337 (210) 1,127
Other non current assets – 78 78
Other current assets 847 132 979
Depending on the date of surrender of CO
2
quotas, these
are recognized within “other non current assets” and
“other current assets” in accordance with IAS 1. The
restated 2022 consolidated balance sheet was adjusted
during the second quarter of 2023 and no longer
corresponds to the figures of the unaudited interim
consolidated financial statements as of March 31, 2023 in
order to reflect this accounting classification for the
comparative period of December 2022.
NOTE 3 SIGNIFICANT EVENTS
3.1 Significant events occurring during the period
Sustainability-linked bonds, for a total amount of
€1 billion
On January 9, 2023, Air France-KLM has placed its first
sustainability-linked bonds, for a nominal amount of €1
billion, linked to the Company’s target to reduce its jet
fuel greenhouse gas (GHG) emissions per revenue tonne
kilometer (RTK) by 10% by 2025, compared to a 2019
baseline, as part of its 2030 SBTi approved objective.
The emission is composed of two tranches:
• a €500 million with a maturity as of May 31, 2026
and a coupon of 7.250%; and
• a €500 million with a maturity as of May 31, 2028
and a coupon of 8.125%.
It has been accounted for in non-current financial
liabilities in balance sheet as of June 30,2023.
Early repayment of €2.5 billion of the bank loan
guaranteed by the French State (“PGE”)
On March 15, 2023, Air France-KLM has fully repaid the
remaining €2.5 billion from its initial €4 billion Bank loan
guaranteed by the French State, granted during the
Covid-19 crisis.
To do so, the Group used the proceeds of €1 billion from
Sustainability-linked bonds issued and €1.5 billion
available cash.
Evolution of perpetual subordinated bonds owned
by the French State
Respectively, on March 17, 2023 and April 19, 2023, Air
France- KLM has repaid the full amount of the
outstanding French State perpetual bonds, under the
terms of temporary framework related to Covid-19 aid,
for €320 million and €317 million (including accrued
coupons).
The Group has also paid the required compensation of
the French State for the shares subscribed in April 2021,
for an amount of €90 million.
In parallel, the Group has refinanced €320 million on
March 17, 2023 and €407 million on April 19, 2023 through
the issuances of new French State perpetual hybrid
bonds as an approved compensation aid to Air France for
damages incurred as a result of Covid-19 between March
17 and June 30, 2020. These new perpetual bonds with no
“bans” attached contain similar financial conditions as the
ones repaid at the same date, with non-call date and
interest rate step-up postponed by an additional two
years (March 2029).
Perpetual hybrid bonds are accounted for in equity as of
June 30, 2023.
2
Financial report
Consolidated financial statements
44 Half Year Report 2023 ― Air France - KLM
Flight AF447 Rio-Paris
Air France was indicted on March 28, 2011, the day after
Airbus was indicted, for involuntary manslaughter in the
context of the crash of AF447 Rio-Paris of June 1, 2009.
An order of dismissal in favor of Air France and Airbus
was issued on September 4, 2019 by the investigating
judges of the Paris “Tribunal de Grande Instance”.
The Public Prosecutor's Office and most of the civil
parties have appealed this decision and the investigation
chamber of the Court of Appeal ruled on May 12, 2021,
sending Airbus and Air France back before the
Correctional Division of the Paris Judicial Court.
A criminal trial took place from October 10 to December
8, 2022 before the Paris Correctional Court. After the
Public Prosecutor's Office requested the acquittal, the
Court issued an acquittal judgement on April 17, 2023
based on the absence of causal link between the alleged
faults and the accident. On April 27, 2023, the General
Prosecutor's Office appealed this decision, and Airbus
and Air France in turn appealed the decision to contest
the respective faults with which they were charged.
The appeal hearings should take place within 12 to 18
months.
Signature of two Revolving Credit Facilities (“RCF”)
linked to ESG KPIs for a total amount of €2.2 billion
On April 18, 2023, Air France-KLM, Air France and KLM
have signed two ESG (“Environmental, Social and
Governance”) KPI-Linked Revolving Credit Facilities
(“RCF”) with a pool of international financial institutions,
for a total amount of €2.2 billion.
For each facility, a set of ESG linked Key Performance
Indicators are embedded in the financing cost. These
indicators are in line with Air France-KLM and the two
airlines’ commitment to sustainable development and a
gradual decarbonization of activities. The two RCFs
include a financing cost margin adjustment mechanism
(upward or downward) conditional to the independent
achievement of these dedicated Indicators (reduction of
the unit CO
2
emission, increase of the share of
Sustainable Aviation Fuel, among others).
Air France-KLM and Air France
Air France-KLM and Air France as combined borrower
signed a €1.2 billion Sustainability-Linked RCF.
This new facility has an initial 2026 maturity, includes two
one-year extension options and provides for a €100
million accordion clause at the lenders’ discretion during
one year following the signing date.
KLM
KLM signed a ESG KPI-linked Revolving Credit Facility for
an amount of €1 billion.
This new facility has an initial 2027 maturity, includes two
one-year extension options and provides a €200 million
accordion clause at the lenders’ discretion.
This facility replaces both the remaining direct loan
granted to KLM by the Dutch State and the existing credit
facility guaranteed by the Dutch State, both which were
cancelled by KLM.
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 45
3.2 Subsequent events
Air France-KLM reverse share split and share
capital reduction
As of July 12, 2023, the Air France-KLM Group has
announced the implementation of the reverse share split
of all outstanding shares of the Company and the share
capital reduction by way of a reduction in the nominal
value of the shares decided by the Board of Directors at
its meeting on July 4, 2023 in accordance with the thirty-
sixth and thirty-seventh extraordinary resolutions of the
Combined General Meeting of June 7, 2023.
Reverse share split
The reverse share split will result in the allocation of 1 new
ordinary share with a par value of 10 euros for 10 existing
ordinary shares with a par value of 1 euro, and in a division
by 10 of the number of outstanding shares.The reverse
share split transactions will begin on July 31, 2023, with
an exchange period open from that date until August 30,
2023 included.
Share capital reduction
From August 31, 2023, the par value of each share in the
Company will be reduced from 10 euros to 1 euro, i.e. a
reduction of 9 euros per share. The amount of this share
capital reduction will be allocated to the "share premium"
account.
After the share capital reduction, the new shares’ par
value will be identical to the par value of today’s shares
(before the reverse share split).
Agreement between Air France-KLM and Apollo
Global Management related to a financing of €500
million
As of July 14, 2023, Air France-KLM and Apollo Global
Management have signed a definitive agreement for
Apollo-managed funds and entities (“Apollo”) to raise a
€500 million financing into an operating affiliate of Air
France that will own a pool of components dedicated to
Air France’s Engineering and Maintenance activities.
Under this agreement, Apollo will subscribe to perpetual
bonds issued by this ad hoc operating affiliate and this
financing will be accounted as equity according IFRS
principles.
The perpetual bonds will bear an interest rate of 6.9% for
the first 3 years and gradual step ups and caps will be
applied thereafter. Air France will have the ability to
redeem them at any time after 3 years.
NOTE 4 ACCOUNTING POLICIES
Pursuant to the European Regulation No. 1606/2002 of
July 19, 2002, the consolidated financial statements of
the Air France-KLM Group as of December 31, 2022 were
established in accordance with the International Financial
Reporting Standards (“IFRS”) as adopted by the European
Union on the date these consolidated financial
statements were established and which were mandatory
at that date.
The condensed interim consolidated financial statements
as of June 30, 2023 have been prepared in accordance
with IAS 34 "Interim financial reporting".
The accounting policies applied for the condensed
interim consolidated financial statements as at June 30,
2023 are consistent with those applied for the financial
statements as at December 31, 2022, with the exception
the of standards and interpretations adopted by the
European Union that are applicable as of January 1, 2023.
The amendments applicable to the Group from
January 1, 2023 are as follows:
– amendment to IAS 1 concerning the
presentation of significant accounting policies in
the financial statements,
– amendment to IAS 8 regarding the definition of
accounting standards,
– amendment to IAS 12 concerning deferred tax
on assets and liabilities resulting from the same
transaction.
These amendments have no significant impact for the
Group.
A study of the impact of legislative changes on
retirement age in France is currently underway. The
expected impact is not significant for the Group.
Finally, the Group is concerned by the application of Pilar
2 and has undertaken work to assess the impact.
The condensed interim consolidated financial statements
as of June 30, 2023 were approved by the Board of
Directors on July 27, 2023.
2
Financial report
Consolidated financial statements
46 Half Year Report 2023 ― Air France - KLM
NOTE 5 CHANGE IN THE CONSOLIDATION SCOPE
No significant acquisitions or disposals took place during the period ended June 30, 2023 and 2022.
NOTE 6 INFORMATION BY ACTIVITY AND GEOGRAPHICAL
AREA
Business segments (note 6.1)
The segment information is prepared on the basis of
internal management data communicated to the
Executive Committee, the Group’s principal operational
decision-making body.
The Group is organized around the following segments:
Network: The revenues for this segment, which includes
the Passenger and Cargo network, primarily come from
passenger transportation services on scheduled flights
with the Group’s airline code (excluding Transavia),
including flights operated by other airlines under code-
share agreements. They also include code-share
revenues, revenues from excess baggage and airport
services supplied by the Group to third-party airlines and
services linked to IT systems. Network revenues also
include freight carried on flights operated under the
codes of the airlines within the Group and flights
operated by other partner airlines under code-share
agreements. Other cargo revenues are derived principally
from the sale of cargo capacity to third parties and the
transportation of shipments on behalf of the Group by
other airlines.
Maintenance: Maintenance operating revenues are
generated through maintenance services provided to
other airlines and customers worldwide.
Transavia: The revenues from this segment come from
the “leisure” activity realized by Transavia.
Other: The revenues from this segment come from
various services provided by the Group and not covered
by the three segments mentioned above.
The results of the business segments are those that are
either directly attributable or that can be allocated on a
reasonable basis to these business segments. Amounts
allocated to business segments mainly correspond to the
EBITDA, current operating income and to the income
from operating activities. Other elements of the income
statement are presented in the “non-allocated” column.
Inter-segment transactions are evaluated based on
normal market conditions.
Geographical segments (note 6.2)
Activity by origin of sales area (note 6.2.1)
Group external sales by origin of sale are broken down
into four geographical areas:
― France, including French overseas departments;
― Benelux, including Dutch Caribbean & Surinam;
― Europe (excluding France and Benelux);
― Rest of the world.
Activity by destination (note 6.2.2)
Group Traffic sales by destination are broken down into
seven geographical areas:
― Metropolitan France;
― Europe (excluding France) and North Africa;
― Caribbean, West Indies, French Guyana and Indian
Ocean;
― Africa (excluding North Africa), Middle East;
― North America, Mexico;
― South America (excluding Mexico);
― Asia and New Caledonia.
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 47
6.1 Information by business segment
Period ended June 30, 2023
Network Maintenance Transavia Other Non-
allocated
Total
(in € million)
Total sales 12,108 1,981 1,089 125 — 15,303
Intersegment sales (13) (1,228) — (110) — (1,351)
External sales 12,095 753 1,089 15 – 13,952
Other revenues — — — 1 — 1
Revenues from ordinary activities 12,095 753 1,089 16 – 13,953
EBITDA 1,482 188 (61) 5 — 1,614
Income from current operations 542 62 (172) (6) — 426
Income from operating activities 575 61 (170) 3 — 469
Share of profits (losses) of associates 1 3 — (3) — 1
Net cost of financial debt and other
financial income and expenses — — — — (174) (174)
Income taxes — — — — (21) (21)
Net income 576 64 (170) — (195) 275
Period ended June 30, 2022
Network Maintenance Transavia Other Non-
allocated
Total
(in € million)
Total sales 9,665 1,742 850 105 — 12,362
Intersegment sales (18) (1,100) — (92) — (1,210)
Revenues from ordinary activities 9,647 642 850 13 – 11,152
EBITDA 943 196 1 12 — 1,152
Income from current operations 43 101 (110) 2 — 36
Income from operating activities 75 100 (110) (5) — 60
Share of profits (losses) of associates — 2 — (3) — (1)
Net cost of financial debt and other
financial income and expenses — — — — (563) (563)
Income taxes — — — — 278 278
Net income 75 102 (110) (8) (285) (226)
2
Financial report
Consolidated financial statements
48 Half Year Report 2023 ― Air France - KLM
6.2 Information by geographical area
6.2.1 Activity by origin of sales area
External sales by geographical area
Period ended June 30, 2023 France,
including
French
overseas
departments
Benelux,
including
Dutch
Caribbean &
Surinam
Europe (excl.
France and
Benelux)
Rest of the
world
Total
(in € million)
Transportation 3,249 1,328 2,510 4,498 11,585
Other sales ⁽¹⁾ 194 102 89 125 510
Total Network 3,443 1,430 2,599 4,623 12,095
Transportation 414 573 98 25 1,110
Other sales ⁽¹⁾ (6) (14) (1) – (21)
Total Transavia 408 559 97 25 1,089
Maintenance 353 327 17 56 753
Others 3 10 2 – 15
Total 4,207 2,326 2,715 4,704 13,952
(1)
This line includes compensation paid to clients in accordance with EU261
Period ended June 30, 2022 France,
including
French
overseas
departments
Benelux,
including
Dutch
Caribbean &
Surinam
Europe (excl.
France and
Benelux)
Rest of the
world
Total
(in € million)
Transportation 2,662 1,152 2,179 3,214 9,207
Other sales ⁽¹⁾ 146 109 73 112 440
Total Network 2,808 1,261 2,252 3,326 9,647
Transportation 290 485 73 15 863
Other sales ⁽¹⁾ (4) (8) (1) — (13)
Total Transavia 286 477 72 15 850
Maintenance 315 262 12 53 642
Others 3 9 1 — 13
Total 3,412 2,009 2,337 3,394 11,152
(1)
This line includes compensation paid to clients in accordance with EU261
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 49
6.2.2 Activity by destination
Traffic sales by geographical area of destination
Period ended June 30, 2023 Metropolit
an France
Europe
(excl.
France)
North
Africa
Caribbean,
French
Guyana,
Indian
Ocean
Africa
(excl.
North
Africa)
Middle
East
North
America,
Mexico
South
America,
excl.
Mexico
Asia,
New
Caledonia
Total
(in € million)
Network 692 2,712 934 1,548 2,818 1,335 1,547 11,585
Transavia 66 954 – 89 – – – 1,110
Total Transportation 758 3,666 934 1,637 2,818 1,335 1,547 12,695
Period ended June 30, 2022 Metropolit
an France
Europe
(excl.
France)
North
Africa
Caribbean,
French
Guyana,
Indian
Ocean
Africa
(excl.
North
Africa)
Middle
East
North
America,
Mexico
South
America,
excl.
Mexico
Asia,
New
Caledonia
Total
(in € million)
Network 580 2,089 856 1,291 2,338 1,092 961 9,207
Transavia 56 757 – 50 – – – 863
Total Transportation 636 2,846 856 1,341 2,338 1,092 961 10,070
NOTE 7 EXTERNAL EXPENSES
Period from January 1 to June 30 2023 2022
(in € million) restated
(1)
Aircraft fuel (including sustainable aviation fuel) 3,442 2,858
CO
2
quotas 81 27
Chartering costs 243 193
Landing fees and air route charges 919 784
Catering 393 319
Handling charges and other operating costs 894 722
Aircraft maintenance costs 1,245 1,118
Commercial and distribution costs 516 384
Other external expenses 916 702
Total 8,649 7,107
(1)
See Note 2 in Notes to the consolidated financial statements.
A portion of external expenses, mainly aircraft fuel and
maintenance, is sensitive to fluctuations in the US dollar
exchange rate.
The hedges covering this currency exposure are
presented in Note 9 “Other current operating income and
expenses”.
2
Financial report
Consolidated financial statements
50 Half Year Report 2023 ― Air France - KLM
NOTE 8 SALARIES AND NUMBER OF EMPLOYEES
Salaries and related costs
Period from January 1 to June 30 2023 2022
(in € million)
Wages and salaries 2,880 2,441
Social contributions 525 447
Pension costs on defined contribution plans 428 383
Pension costs of defined benefit plans 71 68
Cost of temporary employees 110 76
Profit sharing 81 —
Temporary Emergency Bridging Measure for Sustained Employment (NOW) — (138)
Other expenses 69 66
Total 4,164 3,343
The Group pays contributions to a multi-employer plan in
France, the CRPN (public pension fund for crew). Since
this multi-employer plan is assimilated with a French
State plan, it is accounted for as a defined contribution
plan in “pension costs linked to defined contribution
plans”.
Following the impact of the Covid-19 public health crisis,
as of March 23, 2020 Air France and its main French
subsidiaries implemented part-time activity for their
employees. As of June 30, 2022, the impact of these
measures amounted to €116 million.
These measures came to an end at the end of 2022.
The line “Temporary Emergency Bridging Measure for
Sustained Employment (NOW)” includes the
compensation received from the Dutch State for the KLM
Group’s labor expenses during the period from January 1
until March 31, 2022. Due to the recovery of activity, the
Dutch government has terminated this program as of
March 31, 2022. This compensation amounted to
€(138) million for the period from January 1 until June 30,
2022.
Average number of employees
Period from January 1 to June 30 2023 2022 ⁽¹⁾
Flight deck crew 8,436 8,112
Cabin crew 21,542 20,262
Ground staff 44,602 43,610
Temporary employees 2,193 1,735
Total 76,773 73,719
(1)
Excluding partial activity effect.
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 51
NOTE 9 OTHER CURRENT OPERATING INCOME AND EXPENSES
Period from January 1 to June 30 2023 2022
(in € million) restated
(1)
Capitalized production 534 500
Joint operation of routes (21) 1
Operations-related currency hedges 45 37
Other 9 (8)
Total 567 530
(1)
See Note 2 in Notes to the consolidated financial statements.
NOTE 10 AMORTIZATION, DEPRECIATION AND PROVISIONS
Period from January 1 to June 30 2023 2022
(in € million)
Amortization
Intangible assets 81 91
Flight equipment 539 551
Other property, plant and equipment 88 89
Right-of-use assets 590 580
Sub-Total 1,298 1,311
Depreciation and provisions
Inventories – (12)
Trade receivables (9) (55)
Risks and contingencies (101) (128)
Sub-Total (110) (195)
Total 1,188 1,116
Without calling into question the objective of reaching
64% of new-generation aircraft in the fleet by 2028, the
Group has decided to extend the amortization period for
its Boeing B777-300 fleet from 20 to 25 years, generating
a reduction in amortization expense of €41 million over
the period ended June 30, 2023.
The balance sheet movements in provisions for risks and
charges are detailed in Note 21.
2
Financial report
Consolidated financial statements
52 Half Year Report 2023 ― Air France - KLM
NOTE 11 SALES OF AIRCRAFT EQUIPMENT AND OTHER NON-
CURRENT INCOME AND EXPENSES
Period from January 1 to June 30 2023 2022
(in € million)
Sales and leaseback 6 38
Other aeronautical sales 22 1
Sales of aeronautical assets 28 39
Restructuring costs (2) 5
Impairment of fleet (2) (17)
Disposals of other assets 21 1
Other (2) (4)
Other non-current income and expenses 15 (15)
Six-month period ended June 30, 2023
Sales of aircraft equipment
The impact of aircraft sales and leasebacks resulted in a
profit of €6 million in the income statement and a result
on disposal of €150 million in the cash flow statement as
of June 30, 2023.
Other aeronautical sales
The impact of other aeronautical sales mainly
corresponds to a B777 refinancing for KLM and has led to
a gain of €20 million as of June 30, 2023.
Result on the disposal of subsidiaries and affiliates
This line included the profit resulting from disposal of
Heathrow slots to Virgin Atlantic for KLM for €11 million,
and the sale of a data center for KLM for an amount of
€10 million.
Six-month period ended June 30, 2022
Sales of aircraft equipment
The impact of aircraft sales and leasebacks sales had led
to a gain of €38 million and a result on disposal of €438
million in the cash flow statement as of June 30, 2022
Impairment of fleet
This line included mainly the difference between the
initial depreciation plan and the accelerated depreciation
following the early phase-out of the CRJ aircraft from the
Hop! fleet for €(8) million. Depreciation slopes have been
revised so that the net book value as of the date of the
aircraft’s phase-out expected in 2022 converges with the
estimated market value. As of June 30, 2022, 9 CRJ were
still in the Group’s fleet. (4 CRJ still on the fleet as of June
30, 2023).
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 53
NOTE 12 NET COST OF FINANCIAL DEBT AND OTHER
FINANCIAL INCOME AND EXPENSES
Period from January 1 to June 30 2023 2022
(in € million)
Income from marketable securities 60 (11)
Other financial income 48 11
Income from cash and cash equivalents 108 —
Interest on financial liabilities (275) (150)
Interest on lease debt (132) (128)
Capitalized interests 20 14
Other non-monetary items 86 (8)
Other financial expenses 5 (5)
Gross cost of financial debt (296) (277)
Net cost of financial debt (188) (277)
Foreign exchange gains (losses), net 112 (236)
Financial instruments 5 20
Net (charge)/release to provisions (3) (4)
Undiscounting of provision (96) (66)
Other (4) —
Other financial income and expenses 14 (286)
Total (174) (563)
Net cost of financial debt
Income from cash and cash equivalents mainly comprises
interest income from marketable securities and other
financial assets, as well as net income on disposals of
marketable securities.
As of June 30, 2023, the bank loan guaranteed by the
French State (“PGE”) was repaid in full (see Note 3.1
”Significant events occurring during the period”),
generating a net positive impact of €10 million in financial
income, consisting of an expense of €(96) million related
to the guarantee contractually due, recognized in the line
“Interest on financial liabilities” and an income of
€106 million, related to the application of the amortized
cost at the effective interest rate methodology,
recognized in the line “Other non-monetary items”.
Foreign exchange gains (losses)
As of June 30, 2023, the foreign exchange gain mainly
include an unrealized currency gain of €73 million mainly
composed of:
– a gain of €61 million on return obligation
liabilities and provisions on aircraft in US dollars;
– a unrealized gain of €27 million on the net debt,
mainly composed of a loss of €(26) million on
US Dollar and a gain of €67 million on Japanese
Yen.
As of June 30, 2022, the foreign exchange losses mainly
include an unrealized currency loss of €(267) million of
which, mainly, a loss of €(281) million on return obligation
liabilities and provisions on aircraft in US dollars.
Undiscounting of provision
The rate used to undiscount the long term return
obligation liability and provision for leased aircraft non
current is 5.5% in 2023 against 3.6% in 2022 (see
Note 21.1.1 “Return obligation liability and provision on
leased aircraft”).
2
Financial report
Consolidated financial statements
54 Half Year Report 2023 ― Air France - KLM
NOTE 13 INCOME TAXES
13.1 Income tax charge
Current income tax expenses and deferred income tax are detailed as follows:
Period from January 1 to June 30 2023 2022
(in € million)
Current tax (expense) / income and other taxes (2) (4)
Change in temporary differences 5 (12)
(Use / de-recognition) / recognition of tax loss carry forwards (24) 294
Deferred tax income / (expense) (19) 282
Total (21) 278
The current income tax charge relates to the amounts
paid or payable to the tax authorities in the short term for
the period, in accordance with the regulations prevailing
in various countries and any applicable treaties.
French fiscal group
In France, the corporate tax rate, including additional
contribution, is 25.83% for 2023. Tax losses can be carried
forward for an unlimited period. However, the amount of
fiscal loss recoverable each year is limited to 50% of the
profit for the period beyond the first million euros.
The Group limits its recoverability horizon on the deferred
tax losses of the French fiscal group to a period of five
years, consistent with its strategic plan.
The French tax group's deferred tax position for tax losses
remained stable at €346 million compared with
December 31, 2022.
Dutch fiscal group
In the Netherlands, the tax rate is 25.80% in 2023. Tax
losses can be carried forward for an unlimited period.
However, the amount of fiscal loss recoverable each year
is limited to 50% of the profit for the period beyond the
first million euros.
The deferred tax position for tax losses of the Dutch tax
group has been increased to €380 million at June 30,
2023 (from €403 million at December 31, 2022) following
the use of tax losses.
13.2 Deferred tax recorded in equity (equity holders of Air
France – KLM)
Period from January 1 to June 30 2023 2022
(in € million)
Other comprehensive income that will be reclassified to profit and loss 21 (48)
Other comprehensive income that will not be reclassified to profit and loss (11) (21)
Equity instruments (1) 1
Pensions (10) (22)
Total 10 (69)
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 55
13.3 Effective tax rate
The difference between the standard and effective tax rates applied in France is detailed as follows:
Period from January 1 to June 30 2023 2022
(in € million)
Income before tax 295 (503)
Standard tax rate in France 25.83 % 25.83 %
Theoretical tax calculated based on the standard tax rate in France (76) 130
Differences in French / foreign tax rates (1) (2)
Non-deductible expenses or non-taxable income (2) (13)
Variation in unrecognized deferred tax assets 52 168
CAVE impact – (2)
Other 6 (3)
Income tax (21) 278
Effective tax rate 7.1 % 55.3 %
The effective tax rate in France for 2023 is 25.83%.The
effective tax rate in the Netherlands at maturity 2023 is
25.80%.
Deferred tax has been calculated on these bases for the
French and Dutch tax groups.
NOTE 14 EARNINGS PER SHARE
The earnings per share before dilution (basic earnings per
share) corresponds to the net result divided by the
weighted average number of shares in circulation during
the financial year, excluding the weighted average
number of treasury shares.
For the calculation of the diluted earnings per share, the
weighted average number of shares in circulation is
adjusted for the potential dilutive effect of all equity
instruments issued by the Group.
In accordance with IAS 33, the calculation of earnings per
share and diluted earnings per share also takes into
consideration as a deduction from the net income the
compensation due to holders of perpetual subordinated
notes.
Results used for the calculation of basic earnings per share
Period from January 1 to June 30 2023 2022
(in € million)
Net income for the period – Equity holders of Air France – KLM 260 (228)
Coupons on perpetual (34) (105)
Dividend paid ⁽¹⁾ (90) —
Basic net income for the period – Equity holders of Air France – KLM 136 (333)
(1) During the first half of 2023 and in the context of the exit of the French Recapitalization State Aid under the EU Covid-19 Temporary
Framework, the Group paid a €90 million compensation to the French State required for the shares subscribed in April 2021.This
payment was considered as a dividend payment and was therefore recognized in equity accordingly to IFRS principles and has been
taken into consideration as a deduction from the net income to calculate the earnings per share.
2
Financial report
Consolidated financial statements
56 Half Year Report 2023 ― Air France - KLM
Period from January 1 to June 30 2023 2022
(in € million)
Basic net income for the period – Equity holders of Air France-KLM 136 (333)
Consequence of potential ordinary shares on net income: interests paid on convertible
bonds and amortization of equity component 15 —
Net income for the period – Equity holders of Air France-KLM (taken for calculation of
diluted earnings per share) 151 (333)
Reconciliation of the number of shares used to calculate earnings per share
Period from January 1 to June 30 2023 2022
Weighted average number of:
― Ordinary shares issued 2,570,536,136 802,404,926
― Treasury stock held regarding stock option plan (1,152,732) (1,116,420)
― Other treasury stock (91,585) (91,585)
Number of shares used to calculate basic earnings per share 2,569,291,819 801,196,921
Number of potentially dilutive shares 249,709,585 —
Number of ordinary and potential ordinary shares used to calculate diluted earnings per
share 2,819,001,404 801,196,921
As of June 30, 2023, the potential conversion of last-rank
indefinite subordinated bond convertible into new shares
and/or into existing shares representing 199.960.702
shares and the potential conversion of OCEANEs,
representing 49.748.883 shares and the impacts of those
two instruments on net income have been taken into
consideration to determine the diluted earnings per
share.
As of June 30, 2022, the potential conversion of
OCEANEs, representing 49.748.883 shares as well and the
impacts on net income had not been taken into
consideration. The ordinary shares potentially created
would not have decreased the earning per share or
increased the loss per share.
As of June 30, 2023, taking into account the above items,
the basic earnings per share amounts to €0.05 and the
diluted earnings per share amounts to €0.05.
NOTE 15 TANGIBLE ASSETS
(in € million)
Flight equipment Other tangible assets
Owned
aircraft
Assets in
progress Other Total
Land and
buildings
Equipment
and
machinery
Assets in
progress Other Total
Gross value
December 31, 2022 16,804 1,496 2,528 20,828 2,781 1,078 132 1,033 5,024
June 30, 2023 17,194 1,611 2,647 21,452 2,801 1,077 140 1,054 5,072
Depreciation
December 31, 2022 (9,216) – (998) (10,214) (1,970) (858) – (821) (3,649)
June 30, 2023 (9,462) – (1,033) (10,495) (1,982) (866) – (835) (3,683)
Net value
December 31, 2022 7,588 1,496 1,530 10,614 811 220 132 212 1,375
June 30, 2023 7,732 1,611 1,614 10,957 819 211 140 219 1,389
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 57
NOTE 16 CAPITAL EXPENDITURES
The detail of capital expenditures on tangible and intangible assets presented in the consolidated cash flow
statements is as follows:
Period from January 1 to June 30 2023 2022
(in € million) restated ⁽¹⁾
Acquisition of flight equipment 1,215 1,326
Acquisition of tangible assets 88 51
Acquisition of other intangible assets 76 72
Change in accounts payable on acquisitions 17 8
Total 1,396 1,457
(1)
See Note 2 in Notes to the consolidated financial statements.
NOTE 17 RIGHT-OF-USE ASSETS AND LEASE DEBT
The table below presents the right-of-use assets per category (net value):
(in € million) Aircraft Maintenance
Land & Real
Estate Others Total
Net value
December 31, 2022 2,751 2,031 599 47 5,428
June 30, 2023 2,757 2,096 572 55 5,480
The table below presents the lease debt per category:
As of June 30, 2023 As of December 31, 2022
(in € million)
Non-
current Current Total
Non-
current Current Total
Lease debt - Aircraft 2,492 661 3,153 2,566 661 3,227
Lease debt - Real estate 616 93 709 628 101 729
Lease debt - Other 43 9 52 35 18 53
Lease debt - Aircraft spare parts 76 38 114 89 35 124
Accrued interest – 18 18 – 19 19
Total - Lease debt 3,227 819 4,046 3,318 834 4,152
2
Financial report
Consolidated financial statements
58 Half Year Report 2023 ― Air France - KLM
NOTE 18 CASH, CASH EQUIVALENTS AND BANK OVERDRAFTS
As of June 30
As of
December 31
(in € million) 2023 2022
Liquidity funds (SICAV) (assets - debt instruments) 2,474 3,118
Bank deposits and term accounts (assets - debt instruments) 1,961 2,120
Cash in hand 1,734 1,388
Cash and cash equivalents 6,169 6,626
Of which pledged or secured amounts – –
Bank overdrafts (6) (3)
Cash, cash equivalents and bank overdrafts 6,163 6,623
NOTE 19 EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF AIR
FRANCE - KLM SA
19.1 Issued capital
As of June 30, 2023, the issued capital of Air France – KLM
comprised 2,570,536,136 fully paid-up shares. Each share
with a nominal value of one euro is entitled to one vote.
However, since April 3, 2016, shareholders who have
owned their shares for at least two years have benefited
from double voting rights.
The breakdown of the share capital and voting rights is as follows:
% of capital % of voting rights
As of June 30,
2023
As of
December 31,
2022
As of June 30,
2023
As of
December 31,
2022
French State 28.6 28.6 29.0 28.5
Dutch State 9.3 9.3 10.5 10.7
CMA CGM 9.0 9.0 8.1 8.3
China Eastern Airlines 4.7 4.7 6.4 5.6
Delta Air Lines 2.9 2.9 3.9 4.0
Employees and former employees 1.2 1.2 1.5 1.6
Treasury shares 0.1 0.1 0.1 0.1
Other 44.2 44.2 40.5 41.2
Total 100 100 100 100
The line “Employees and former employees” includes the
shares held by employees and former employees
identified in the “Fonds Communs de Placement
d’Entreprise (FCPE)”.
Air France-KLM announced on July 12, 2023, the
implementation of the reverse share split of all
outstanding shares of the Company and a share capital
reduction by way of a reduction in the nominal value of
the shares (see Note 3.2 “Subsequent events”).
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 59
19.2 Perpetual
(in € million) December
31, 2022
Monetary
decrease -
Nominal
Monetary
increase -
Nominal
Monetary
change -
Coupons
Non-
monetary
change
June 30,
2023
2021 perpetual super-
subordinated bonds ⁽¹⁾ Nominal 595 (595) – – – –
Coupons 31 – – (42) 11 –
2023 perpetual super-
subordinated bonds ⁽²⁾ Nominal – – 728 – – 728
Coupons – – – – 13 13
Last-rank indefinite
subordinated bond convertible
into new shares and/or existing
shares Nominal 305 – – – – 305
Coupons 2 – – (10) 10 2
Total Perpetual - attributable to
equity holders of Air France-
KLM 933 (595) 728 (52) 34 1,048
Perpetual Nominal 497 – – – – 497
Coupons 13 – – – 14 27
Total Perpetual - Non-
controlling interests 510 – – – 14 524
Total cash flows (595) 728 (52)
(1) On March 17, 2023 and April 19, 2023, Air France- KLM has repaid the full amount of the outstanding French State perpetual bonds
(refer to Note 3.1 “Significant events occurring during the period”).
(2) In parallel, the Group had refinanced €728 million through the issuance of new French State perpetual hybrid bonds with no bans
attached (refer to Note 3.1 “Significant events occurring during the period”).
NOTE 20 RETIREMENT BENEFITS AND PENSION ASSETS
As of June 30, 2023, the discount rates used by the
companies to calculate the defined benefit obligations
are the following:
June 30, 2023 December 31, 2022
Euro zone – duration 10 to 15 years 3.81 % 3.80 %
UK – duration 20 years and more 5.25 % 4.80 %
The inflation rates used are the following:
June 30, 2023 December 31, 2022
Euro zone – duration 10 to 15 years 2.55 % 2.55 %
UK – duration 20 years and more 3.30 % 3,35 %
The 10 to 15 years duration rate mainly concerns the plans
located in France.
2
Financial report
Consolidated financial statements
60 Half Year Report 2023 ― Air France - KLM
As of June 30, 2023, the remeasurement of defined benefit pension obligation is composed of:
June 30, 2023 June 30, 2022
Impact of the change in discount rate 29 671
Impact of the change in inflation rate 2 (63)
Difference between the expected and actual return on assets 20 (193)
Total 51 415
The impact of variations in discount rates on the defined
benefit obligation has been calculated using the
sensitivity analysis of the defined benefit pension
obligation. The sensitivity analysis is outlined in the
note 30.2 to the consolidated financial statements for the
year ended December 31, 2022.
NOTE 21 RETURN OBLIGATION LIABILITY AND PROVISION FOR
LEASED AIRCRAFT AND OTHER PROVISIONS
(in € million) Return
obligation
liability on
leased
aircraft
Maintenance
on leased
aircraft
Restruc-
turing
Litigation Provisions
for CO
2
quotas
surrender
Others Total
Amount as of January 1, 2022 3,809 152 416 424 36 103 4,940
Of which: Non-current 3,433 128 – 405 – 89 4,055
Current 376 24 416 19 36 14 885
Amount as of December 31,
2022 3,836 161 192 426 142 132 4,889
Of which: Non-current 3,496 147 – 397 – 109 4,149
Current 340 14 192 29 142 23 740
Amount as of June 30, 2023 3,810 169 128 414 91 120 4,732
Of which: Non-current 3,609 149 – 31 – 96 3,885
Current 201 20 128 383 91 24 847
The movements in provisions for litigation and other risks
and charges with an impact on the income statement are
booked in the lines of the income statement
corresponding to the nature of the expenses.
21.1 Provisions
21.1.1 Return obligation liability and provision on leased aircraft
The movements in return obligation liabilities and
provisions (revaluation of future costs and change in
discount rate) are booked in the components
corresponding to the potential and restoration work
performed on leased aircraft and recorded in the right-
of-use assets. The effects of discounting and foreign
exchange translation on return obligation liabilities and
provisions recorded in local currencies are recognized in
“Other financial income and expenses” (see Note 12 “Net
cost of financial debt and other financial income and
expenses”).
The discount rate used to calculate these restitution
liabilities and provisions relating to leased aircraft,
determined on the basis of a short-term risk-free rate
increased by a spread on risky debt (used for companies
with high financial leverage), is 5.5% as of June 30, 2023
against 3.6% as of December 31, 2022 (see Note 12 “Net
cost of financial debt and other financial income and
expenses”).
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 61
21.1.2 Restructuring provisions
The movements in restructuring provisions with a
significant impact on the income statement are booked
in “Other non-current income and expenses” (see Note 11
“Sales of aircraft equipment and other non-current
income and expenses”).
21.1.3 Litigation
An assessment of litigation risks with third parties has
been carried out with the Group’s attorneys and
provisions have been recorded whenever circumstances
require.
Provisions for litigation with third parties also include
provisions for tax risks. Such provisions are set up when
the Group considers that the tax authorities, within the
framework of tax audits, could reasonably challenge a tax
position adopted by the Group or one of its subsidiaries.
In the normal course of its activities, the Air France–KLM
Group, its subsidiaries Air France and KLM (and their
subsidiaries) are involved in litigation cases, some of
which may be significant.
21.1.4 Litigation concerning anti-trust laws in the air-freight
industry
Air France, KLM and Martinair, a wholly-owned subsidiary
of KLM since January 1, 2009, have been involved, since
February 2006, with up to twenty-five other airlines in
investigations initiated by the antitrust authorities in
several countries, with respect to allegations of anti-
competitive agreements or concerted actions in the air
freight industry.
As of December 31, 2021, most of these investigations had
been terminated following the entry into plea
agreements between the three companies of the Group
and the appropriate competition authorities, providing
for the payment of settlement amounts or fines, with the
exception of the proceeding initiated by the European
Commission, which is still pending.
In Europe, the decision of the European Commission of
2010 against eleven air cargo carriers, including the
companies of the Group, Air France, KLM and Martinair,
was annulled by the General Court of the European Union
on December 16, 2015 because it contained a
contradiction regarding the exact scope of the practices
sanctioned. On March 17, 2017, the European Commission
issued a new decision against the aforementioned cargo
carriers, including Air France, KLM and Martinair. The total
amount of fines imposed in respect of this decision at the
Air France-KLM Group level was €339 million. This
amount was slightly reduced by €15.4 million compared
to the initial decision owing to a lower fine for Martinair
due to technical reasons. On May 29 and 30, 2017, the
Group companies filed an appeal against this decision
before the General Court of the European Union. The
hearings before the General Court took place on June
and July 2019.
Decision from the General Court in March 2022 confirmed
the fines against Air France-KLM group companies. The
Group companies appealed in June 2022 to the European
Union Court of Justice, decision expected in 16-24
months. The Group has maintained a provision covering
the total amount of these fines.
In Switzerland, the Federal Administrative Court
cancelled the decision of the Competition Authority that
imposed a €4 million fine for lack of competence.
Consequently the €4million provision was cancelled as of
December 31, 2022.
As of June 30, 2023, the total amount of provisions in
connection with proceedings, which have yet to give rise
to definitive decisions amounts to €355 million. It has
been reclassified in short-term position as of
June 30, 2023.
21.1.5 Case brought against KLM by (former) Martinair pilots
In 2015, a case was brought against KLM by 152 (former)
Martinair airline pilots, hereafter called “Vrachtvliegers”.
In 2016 and 2018, the District Court and Court of Appeal
ruled in favor of KLM and rejected all claims of plaintiffs.
In November 2019, however, the Supreme Court ruled
against KLM on the basis of lack of sufficient motivation
and referred the case to another Court of appeal. On
June 8, 2021, this Court of appeal rendered its judgment
in favor of the plaintiffs, the former Martinair pilots, ruling
that the transfer of the cargo department qualifies as a
transfer of undertaking.
According to the ruling the rights and obligations under
2
Financial report
Consolidated financial statements
62 Half Year Report 2023 ― Air France - KLM
the employment contracts of 116 Martinair pilots
automatically transfer to KLM as per January 1
st
, 2014. The
Court of Appeal rejected the plaintiffs’ claim to also
transfer the rights regarding seniority accrued at
Martinair.
Vrachtvliegers filed complaints on August 8, 2021 at the
Supreme Court claiming that the rights regarding
seniority accrued at Martinair should transfer to KLM. On
January 20, 2023 the Supreme Court rejected plaintiffs’
claim to also transfer the rights regarding seniority
accrued at Martinair. The Supreme Court however also
ruled that the decision of the Court of Appeal in which
the Court denies the same claim in a situation of
redundancy was insufficient motivated. Plaintiffs have
not yet started a new case at another Court of Appeal for
this last issue.
The pilots also started a second court case about the
implementation by KLM of the “transfer of undertaking ».
On November 15, 2023 a hearing is set in this court case.
In 2021, KLM had booked a provision for a total amount of
€22 million, unchanged in 2022 and 2023.
21.1.6 Other provisions
Other provisions relate principally to provisions for
onerous contracts, provisions for the portion of CO
2
emissions not covered by the free allocation of quotas
and provisions for the dismantling of buildings on non-
freehold land.
21.2 Contingent liabilities
The Group is involved in several governmental, judicial
and arbitration procedures for which in most cases
provisions have not been recorded in the financial
statements in accordance with the applicable accounting
rules. Indeed, with respect to most cases the Group is not
in a position at this stage in these procedures, to give a
reliable estimate of the potential loss that could be
incurred in connection with these disputes.
21.2.1 Litigations concerning anti-trust laws in the air-freight
industry
Following the initiation of various investigations by the
competition authorities in 2006 and the European
Commission decision in 2010, several collective and
individual actions were brought by forwarders and air-
freight shippers in the civil courts against Air France, KLM
and Martinair, and other cargo operators, in a number of
jurisdictions.
Under these civil lawsuits, shippers and freight
forwarders are claiming for damages to compensate
alleged higher prices due to alleged competition law
infringement.
Although significant amounts have been reported by the
media, plaintiffs are mostly claiming for unspecified and/
or insufficiently substantiated damages against
defendants taken as a whole (and not individually) and
the EU decision to which the plaintiffs refer to is still not
definitive.
The Group companies and the other airlines involved in
these lawsuits continue to vigorously oppose all such civil
claims. For Air France, KLM and Martinair the main civil
claims still pending are those in the Netherlands and in
Norway.
21.2.2 Other litigations
Rio-Paris AF447 flight
Air France was indicted on March 28, 2011, the day after
Airbus was indicted, for involuntary manslaughter in the
context of the crash of AF447 Rio-Paris of June 1, 2009.
An order of dismissal in favor of Air France and Airbus
was issued on September 4, 2019 by the investigating
judges of the Paris “Tribunal de Grande Instance”.
The Public Prosecutor's Office and most of the civil
parties have appealed this decision and the investigation
chamber of the Court of Appeal ruled on May 12, 2021,
sending Airbus and Air France back to the Paris
Correctional Court.
A criminal trial took place from October 10 to
December 8, 2022 before the Paris Correctional Court.
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 63
After the Public Prosecutor's Office requested the
acquittal, the Court issued an acquittal judgement on
April 17, 2023 based on the absence of causal link
between the alleged faults and the accident. On
April 27, 2023, the General Prosecutor's Office appealed
this decision, and Airbus and Air France in turn appealed
the decision to contest the respective faults with which
they were charged.
The appeal hearings should take place within 12 to 18
months.
NOTE 22 FINANCIAL LIABILITIES
As of June 30, 2023 As of December 31, 2022
(in € million)
Non
current Current Total
Non
current Current Total
Perpetual subordinated loan in Yen 127 – 127 142 – 142
Perpetual subordinated loan in Swiss francs 383 – 383 381 – 381
OCEANE (convertible bonds) 492 – 492 487 – 487
Sustainability-linked bonds 1,000 – 1,000 – – –
Plain vanilla Bonds 1,683 – 1,683 1,686 – 1,686
Debt on financial leases with bargain option 3,277 459 3,736 3,163 496 3,659
Loan guaranteed by the French state – – – 2,606 – 2,606
Other financial liabilities 1,262 180 1,442 1,191 293 1,484
Accrued interest 1 36 37 1 107 108
Total - Financial liabilities 8,225 675 8,900 9,657 896 10,553
Change in financial liability
(in € million)
As of
December 31,
2022
New financial
debt
Reimburseme
nt of financial
debt
Currency
translation
adjustment Other
As of June 30,
2023
Perpetual loan in Japanese Yen
and Swiss Francs 523 – – (13) – 510
OCEANE (convertible bonds) 487 – – – 5 492
Sustainability-linked bonds ⁽¹⁾ – 1,000 – – – 1,000
Plain vanilla Bonds 1,686 – – (3) – 1,683
Debt on financial leases with
bargain option 3,659 400 (267) (47) (9) 3,736
Loan guaranteed by the French
state ⁽²⁾ 2,606 – (2,500) – (106) –
Other financial liabilities 1,484 158 (202) (2) 4 1,442
Accrued interest 108 – – (1) (70) 37
Total 10,553 1,558 (2,969) (66) (176) 8,900
(1) In January 2023, Air France-KLM Group placed a €1 billion sustainability-linked bonds (refer to Note 3.1 “Significant events occurring
during the period”).
(2) In March 2023, Air France-KLM has early fully repaid the remaining €2.5 billion from its initial €4 billion bank loan guaranteed by the
French State (refer to Note 3.1 “Significant events occurring during the period”). The €106 million income recognized in the financial
result following the initial recognition of this liability at amortized cost using the effective interest rate methodology is included in
the column “Other” of the change in financial liability (refer to Note 12 “Net cost of financial debt and other financial income and
expenses”).
2
Financial report
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64 Half Year Report 2023 ― Air France - KLM
Maturity analysis
The financial liabilities maturities break down as follows:
As of June 30,
2023
As of
December 31,
2022(in € million)
Maturities in
End of Year N 380 —
Y+1 1,515 896
Y+2 1,517 2,697
Y+3 1,721 2,851
Y+4 538 1,191
Over 4 years 3,229 2,918
Total 8,900 10,553
As of June 30, 2023, the KLM perpetual subordinated
notes are included in the line “Over 4 years”.
The bonds issued in 2016, 2020, 2021 and 2023 will be
reimbursed on their contractual maturity dates.
Credit lines
On April 18, 2023, Air France-KLM, Air France and KLM
have signed two ESG (“Environmental, Social and
Governance”) KPI-Linked Revolving Credit Facilities
(“RCF”) with a pool of international financial institutions,
for a total amount of €2.2 billion (refer to Note 3.1
“Significant events occurring during the period”). This
facility signed by KLM replaces both the remaining direct
loan granted to KLM by the Dutch State and the existing
credit facility guaranteed by the Dutch State, both which
were cancelled by KLM.
With two other credit lines available for KLM, the
undrawn portion as of June 30, 2023 amounts to €2.3
billion.
NOTE 23 NET DEBT
As of June 30,
2023
As of
December 31,
2022(in € million) Notes
Current and non-current financial liabilities 22 8,900 10,553
Current and non-current lease debt 17 4,046 4,152
Accrued interest 17 & 22 (55) (127)
Deposits related to financial liabilities (102) (101)
Deposits related to lease debt (100) (99)
Derivatives impact on debt (15) (35)
Gross financial liabilities (I) 12,674 14,343
Cash and cash equivalents 18 6,169 6,626
Marketable securities > 3 months 624 572
Bonds 987 811
Bank overdrafts 18 (6) (3)
Net cash (II) 7,774 8,006
Net debt (I-II) 4,900 6,337
As of June 30, 2023, net cash includes €427 million
pledged or secured (€425 million as of December 31,
2022).
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 65
As of June 30,
2023(in € million) Notes
Opening net debt 6,337
Operating free cash flow (1,661)
Compensation paid to the French State +90
Perpetual repayment to the French State 19.2 +595
Issuance of new French state perpetual hybrid bonds 19.2 (728)
Paid coupons on perpetual and subordinated bonds convertible into new share and/or
exchangeable for existing shares 19.2 +52
New lease debts (new and renewed contracts) +393
Unrealized exchange gains and losses on lease financial debts through OCI (79)
Impact of derivatives on net debt +20
Impact of Effective Interest Rate methodology on State loans 22 (106)
Currency translation adjustment in the income statement (41)
Amortization of OCEANE optional part +5
Other non-monetary variations of the net debt +23
Closing net debt 4,900
NOTE 24 OTHER LIABILITIES
As of June 30, 2023 As of December 31, 2022
(in € million) Current Non-current Current Non-current
Tax liabilities 1,314 747 1,231 854
Employee-related liabilities 1,749 789 1,175 1,335
Liabilities on fixed assets 32 3 55 –
Deferred income 932 33 877 34
Prepayments received 430 – 412 –
Other 298 124 307 120
Total 4,755 1,696 4,057 2,343
Non-current deferred income mainly relates to long-term
contracts in the maintenance business.
NOTE 25 FLIGHT EQUIPMENT ORDERS
Due dates of firm orders commitments to the purchase
of aircraft equipment are as follows:
2
Financial report
Consolidated financial statements
66 Half Year Report 2023 ― Air France - KLM
As of June 30,
2023
As of
December 31,
2022(in € million)
2nd semester year Y (6 months) 1,250 –
Year Y+1 1,682 1,782
Year Y+2 2,259 2,004
Year Y+3 1,455 1,985
Year Y+4 1,696 1,474
After Year Y+4 751 2,438
Total 9,093 9,683
These commitments mainly relate to amounts in US
dollars, converted into euros at the closing date
exchange rate. All these amounts are hedged.
The number of aircraft under firm order as of June 30,
2023 decreased by 12 units compared with December 31,
2022 and stood at 166 aircrafts.
This change is explained by the delivery of 12 aircrafts.
Long-haul fleet (passenger)
The Group took delivery of 3 Boeing B787s.
Medium-haul fleet
The Group took delivery of 9 Airbus A220s.
Regional fleet
The Group did not take delivery of any aircraft.
Aircraft type To be delivered in
2nd
semester
Y (6
months) Y+1 Y+2 Y+3 Y+4
Beyond
Y+4 Total
Long-haul fleet – Passenger
A350
As of June 30, 2023 7 6 5 – – – 18
As of December 31, 2022 – 7 6 5 – – 18
B787
As of June 30, 2023 – 4 1 – – – 5
As of December 31, 2022 – 3 4 1 – – 8
Long-haul fleet – Cargo
A350F
As of June 30, 2023 – – – 2 4 2 8
As of December 31, 2022 – – – – 2 6 8
Medium-haul fleet
A220
As of June 30, 2023 7 14 14 – – – 35
As of December 31, 2022 – 16 16 12 – – 44
A320 Neo
As of June 30, 2023 – – 7 15 24 13 59
As of December 31, 2022 – – – 7 15 37 59
A321 Neo
As of June 30, 2023 – 9 7 13 9 3 41
As of December 31, 2022 – – 9 7 13 12 41
Total
As of June 30, 2023 14 33 34 30 37 18 166
As of December 31, 2022 – 26 35 32 30 55 178
NOTE 26 RELATED PARTIES
There were no significant changes in the scope or
amounts of related party transactions during the period,
with the exception of the transactions with the French
and Dutch governments described in note 3.1 “Significant
events occurring during the period”.
Financial report
2
Consolidated financial statements
Half Year Report 2023 ― Air France - KLM 67
3.1 Certification by the person responsible
July 28, 2023
I hereby declare that, to the best of my knowledge, the
condensed financial statements for the first half of the
2023 financial year have been established in accordance
with the applicable accounting standards and give a true
and fair view of the assets, financial position and results
of the Company, and of all the companies within the
consolidation scope, and that the first half activity report
presents a true picture of the significant events arising
during the first six months of the financial year and of
their impact on the first half financial statements, the
main related party agreements together with a
description of the principal risks and uncertainties for the
remaining six months of the financial year.
Benjamin Smith
Chief Executive Officer of Air France – KLM
INFORMATION AND CONTROL
3
Statutory Auditors’ review
Half Year Report 2023 ― Air France - KLM 69
3.2
Statutory Auditors’ review report of the 2023 first half
financial information
Air France-KLM S.A.
7, rue du Cirque, 75008 Paris
Statutory Auditors’ Review Report on the 2023 Half-yearly Financial Information
For the period from January 1 to June 30, 2023
To the Shareholders,
In compliance with the assignment entrusted to us by
your Shareholders’ Meetings and in accordance with the
requirements of article L. 451-1-2 III of the French
Monetary and Financial Code ("Code monétaire et
financier"), we hereby report to you on:
– the review of the accompanying condensed
half-yearly consolidated financial statements of
Air France-KLM S.A., for the period from January
1, 2023 to June 30, 2023,
– the verification of the information presented in
the half-yearly management report.
These condensed half-yearly consolidated financial
statements are the responsibility of the Board of
Directors. Our role is to express a conclusion on these
financial statements based on our review.
I - Conclusion on the financial statements
We conducted our review in accordance with
professional standards applicable in France.
A review of interim financial information consists of
making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical
and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with
professional standards applicable in France and
consequently does not enable us to obtain assurance that
we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not
express an audit opinion.
Based on our review, nothing has come to our attention
that causes us to believe that the accompanying
condensed half-yearly consolidated financial statements
are not prepared, in all material respects, in accordance
with IAS 34 - standard of the IFRSs as adopted by the
European Union applicable to interim financial
information.
Without qualifying our conclusion, we draw your
attention to the matter set out in note 2 to the
condensed half-yearly consolidated financial statements
entitled "Restatement of the 2022 financial statements",
which describes a change in accounting method
regarding the accounting treatment of emission trading
scheme.
II - Specific verification
We have also verified the information presented in the
half-yearly management report on the condensed half-
yearly consolidated financial statements subject to our
review. We have no matters to report as to its fair
presentation and consistency with the condensed half-
yearly consolidated financial statements.
Paris La Défense and Neuilly sur Seine, July 28, 2023
The Statutory Auditors
KPMG S.A. PricewaterhouseCoopers Audit
Valérie Besson Eric Dupré
Philippe
Vincent
Amélie Jeudi
de Grissac
Parter Parter Parter Parter
3
INFORMATION AND CONTROL
Certification
70 Half Year Report 2023 ― Air France - KLM
