Air France-KLM has cut its capacity growth forecast for 2026 to between 2% and 4%, down from the previously expected 3% to 5%. This decision comes amid a projected $2.4 billion increase in fuel costs due to ongoing geopolitical tensions, particularly related to the Iran war.
The airline anticipates its total fuel bill for 2026 will reach $9.3 billion, marking a significant rise compared to 2025. Concerns about the blockage of the strait of Hormuz have pushed Brent crude prices to a four-year high of $126 per barrel.
In the first quarter of 2026, Air France-KLM reported an operating loss of €27 million, which is better than analysts’ projections of a €389 million loss. KLM’s Back on Track improvement program contributed €159 million in savings during this period.
KLM CEO Marjan Rintel stated that ongoing geopolitical uncertainty and sharply increased fuel prices will pressure results from the second quarter. Rintel noted that KLM cannot fully pass on high fuel prices to customers, which will impact profitability.
Ben Smith, CEO of Air France-KLM, described the operating environment as “uncertain.” He emphasized that these rising costs present significant challenges for the airline industry as it seeks to maintain cost control while managing capacity growth.
As the situation develops, industry observers will closely monitor how Air France-KLM adapts its strategies in response to these economic pressures. The next steps will likely focus on further cost control measures and adjustments in capacity planning.
