Air France KLM - Large Q2 write-downs; plan for equity by May 2021

Davy Research
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Post the government financial packages, Air France KLM now has €14.2bn in liquidity to weather the crisis; however, it will be a long road ahead to deleverage and restructure, with equity and quasi-equity planned by May 2021. The transformation plan targets have been pushed one year to 2025 (7-8% operating margin) and positive operating free cash flow to 2023. The Q2 operating losses of -€1553m were largely in line with consensus, with write-downs pushing the net loss to -€2612m (Davy: -€2422m).