Air France-KLM Shares Drop Nearly 4%, Weighed Down by Oil at $106 a Barrel
Air France-KLM faces a sharp decline this Friday, amid a significant rise in oil prices which directly impacts the costs of air transport. The stock has fallen nearly 4% and is down more than 6% over the week, as the first quarter results are expected on April 30.
Sector-Wide Downturn as Oil Prices Soar
Air France-KLM shares fell by 3.88% mid-morning to 9.212 euros, after closing at 9.58 euros the previous day. This drop is part of a broader sector movement: Brent crude surpassed $106 per barrel on April 24, marking a 12% increase over five days, fueled by a risk premium associated with military tensions in the Strait of Hormuz. Disruptions in this strategic passage, which accounts for about one-fifth of the global trade in oil and gas, mechanically increase the kerosene bill for airlines.
The European aerospace sector is under the same pressure: Airbus is down 2.78% and Safran has lost 3.05% during the session. The CAC 40 is down 1.05% at the same time, while the SBF 120 shows similar declines. If the oil shock were to persist beyond $100 per barrel, fuel — the primary operational expense for the Franco-Dutch group — could significantly impact margins in the coming quarters. Air France-KLM will publish its first quarter accounts on April 30, an event that will allow for an initial assessment of the impact of these rising energy costs.
Technical Analysis Shows Bearish Trend
Technically, the stock is significantly below its 50-day (10.37 euros) and 200-day (11.33 euros) moving averages, confirming a bearish trend that has been in place for several weeks. The loss over three months is 13.79%. The price is currently in the lower part of the Bollinger Bands, at 36% of the band, between a lower bound of 8.37 euros and an upper bound of 10.73 euros, signaling an approach to the oversold threshold without it yet being reached. The nearest support is at 8.56 euros, approximately 7% below the current price.
The group's general assembly is scheduled for June 3. Until then, the quarterly publications on April 30 will serve as a crucial catalyst to assess management's ability to absorb the increased cost of kerosene. It is worth noting that despite the recent decline, the stock still shows a positive performance of 19.79% over a year, indicating that the current correction follows a phase of significant appreciation.
