Air France-KLM Drops 4.21% in Wednesday Session
Air France-KLM falls by 4.21% to 10.7950 euros this Wednesday following a downgrade by Barclays to 'underweight', driven by concerns about the French political context and operational difficulties at KLM. The French government could write off up to 728 million euros in Covid-19 related debts, according to La Lettre.
Reasons Behind the Downgrade
Barclays' downgrade to 'underweight' from 'equal weight' previously, is based on concerns related to the climate of political uncertainty in France and operational difficulties at the KLM subsidiary. The broker highlights several obstacles to KLM's profitability recovery, including increased airport charges in Amsterdam, a shortage of flight staff, and strained relations with pilot unions. Barclays also expresses concerns about the group's exposure to risks in the Atlantic market, particularly in the premium leisure travel segment. Meanwhile, the French executive could proceed to write off debts for a maximum of 728 million euros in 2026, according to La Lettre, a measure included in the finance bill and authorized by the European Commission to compensate for losses related to the Covid-19 pandemic. However, this announcement published on January 13th was not enough to support the stock price.
Current Stock Performance
The stock is now trading at 10.7950 euros, down 4.21% compared to Tuesday's close at 11.27 euros. The traded share capital reaches 0.35%, indicating moderate activity. Technically, the price is dangerously approaching its support threshold at 10.12 euros, after failing to exceed the resistance at 12.28 euros tested at the beginning of January. The 50-day moving average is at 10.93 euros, while the 200-day average is at 10.63 euros, confirming that the stock is still trading above its medium and long-term benchmarks despite the recent decline. The RSI is at 43, indicating a weakening of the upward momentum without yet entering an oversold zone. This configuration suggests that the stock still has some leeway before reaching levels considered as oversold. The MACD histogram is negative at -0.09, with the MACD line at 0.17 slightly below its signal line at 0.26, confirming a short-term loss of momentum. Investors will closely monitor the maintenance of the support at 10.12 euros, as a downward breach could pave the way for further declines.
