Air France-KLM Shares Drop 4.4%: Soaring Oil Prices Threaten Margins
The stock of the Franco-Dutch airline group experienced a sharp decline this Thursday, amid soaring oil prices due to tensions in the Middle East. Air France-KLM traded at 8.912 euros during the session, marking a 4.4% drop from the previous day's close, while the CAC 40 index fell by 1.25% at the same time.
Oil Prices Surge, Increasing Cost Pressures for Air France-KLM
Brent crude jumped about 6% in twenty-four hours to around 108 dollars a barrel this Thursday morning, following the collapse of ceasefire hopes between Washington and Tehran. Iran denied having requested a ceasefire and promised large-scale strikes, while the United States announced the continuation of its military operations for several weeks. For Air France-KLM, whose jet fuel is one of the primary operational expenses, this surge in crude prices represents a direct pressure on margins. The stock now shows a decline of nearly 23% over three months, indicating a continuous erosion since the start of the year. The aerospace sector as a whole is suffering in the session: Airbus is down 2.79% and Safran has fallen by 1.89%. In this context, Morgan Stanley lowered its price target on the stock this Thursday, from 11.70 euros to 9.60 euros, while maintaining its 'market weight' recommendation. The new target remains about 7.7% above the current price, but the revision reflects a more cautious anticipation by the American bank on the group's prospects in the face of the geopolitical and energy environment.
Technical Analysis Shows Bearish Trends
Technically, the stock is trading well below its main moving averages. The price of 8.912 euros is significantly lower than the MM50 (10.74 euros) and the MM200 (11.30 euros), confirming a bearish trend that has been established for several weeks. The proximity of the support threshold identified at 8.56 euros deserves special attention: a downward breach could mark an acceleration of the selling movement. The stock has indeed touched the lower part of its Bollinger bands during the session, located at 8.42 euros, which illustrates the current selling pressure. The next key event for the group will be the publication of its first-quarter 2026 results, expected on April 30. This milestone will allow an assessment of the concrete impact of the oil price rise on the company's cost structure, as well as the evolution of passenger traffic in a context of geopolitical instability in the Middle East.
