Air France-KLM cuts capacity growth forecast amid expected $2.4bn fuel bill rise | Air France/KLM
Air France-KLM has cut its capacity growth forecasts for this year as the Iran war has increased fuel costs by billions of dollars.
The Franco-Dutch airline expects its fuel bill to rise by $2.4bn (£1.8bn) this year as a result of a rise in costs since the start of the Middle East conflict. In contrast, it lowered its expectations for capacity growth to between 2% and 4% this year, having previously reduced it from 3% to 5%.
Air France-KLM chief executive Ben Smith said increases in fuel prices were “expected to put pressure on the coming quarters” after the company reported a smaller-than-expected loss for the first three months of the year. Smith added that the work environment remains “uncertain.”
Air France-KLM is implementing a “changing fuel hedging policy” that will save the airline $1.5 billion. Despite this, the airline’s total fuel bill in 2026 is expected to be 9.3 billion dollars, an increase of 2.4 billion dollars compared to 2025. It is expected to spend $1.1 billion more on fuel in the April-June quarter.
The airline reported an operating loss of €27 million (€23.4 million) in the first quarter; This figure is better than the 389 million euro loss that analysts had predicted.
An initial increase followed the outbreak of the Iran war, as more passengers chose European carriers for flights to Asia and increased ticket prices in response to a rise in fuel costs, he said.
Earlier this week, Europe’s airport trade body warned that small airports in the region may not survive if jet fuel shortages lead to widespread route cancellations.
Concerns that the blockage in the Strait of Hormuz could last for months pushed Brent crude oil prices up to $126 a barrel on Thursday, a four-year high.
Despite geopolitical uncertainty, UK jet engine maker Rolls-Royce is sticking to its profit target for this year. The company’s CEO, Tufan Erginbilgiç, will tell shareholders at the annual general assembly meeting on Thursday that the engineering group has “taken the necessary measures to support our employees, customers and suppliers.”
“We expect to fully mitigate the current financial impact of the disruptions on our business. We will continue to monitor the situation for future direct and indirect impacts and will take the necessary actions to mitigate them.”
