Af-Klm soars in Paris on the back of its financial results, cost-cutting measures and a favourable court ruling

(Il Sole 24 Ore Radiocor) – A week to remember on the Paris Stock Exchange for Air France-KLM. The Franco-Dutch airline’s shares have recorded a series of gains, resulting in a rise of well over 28 per cent in the share price over five trading sessions. The positive performance over the first three days of the week was followed by a 12 per cent jump on Thursday, driven by better-than-expected results and a new cost-cutting plan at KLM. The share is also benefiting from the favourable ruling on the long-running and complex state aid case. The Court of Justice of the European Union has overturned a previous ruling which had deemed illegal Brussels’ 2020 approval of €3.4 billion in state aid granted by the Netherlands to the airline KLM during the Covid-19 pandemic. The group had appealed to the Court of Justice following a 2024 ruling by the General Court of the European Union, which had declared the European Commission’s approval of the aid to be unlawful, following an appeal by Ryanair. The Court of Justice of the EU has ruled in favour of the Franco-Dutch group, and the immediate consequence of the judgement is the reinstatement of the Commission’s decision, which had previously been annulled. However, the Court of Justice has referred the case back to the General Court so that it may examine the other arguments raised by Ryanair, which the General Court had not addressed at first instance. Air France-KLM emphasises that it will do everything possible to defend its interests in the case and has reiterated that all support measures received by the group and its subsidiaries during the Covid-19 pandemic have been repaid with interest from 2023 onwards, in accordance with the applicable legal framework.

Meanwhile, trading is also going well for Ryanair, thanks to analysts’ comments. The Irish low-cost airline’s shares are performing well on the Dublin Stock Exchange. Barclays has raised its recommendation from ‘market weight’ to ‘overweight’ and revised its target price upwards from 24 to 29 euros. Bernstein has confirmed its ‘buy’ recommendation, with a target price of 30 euros.