Air France-KLM Shares Rise 2.85% at Close Following Bid for TAP Portugal

Formal Expression of Interest Submitted for TAP Portugal Privatization

On Wednesday, Air France-KLM officially submitted its expression of interest to Parpública to participate in the privatization of TAP Air Portugal, marking its official entry into a strategic race that also involves Lufthansa and IAG. The process aims to sell up to 44.9% of the Portuguese national airline's capital, with the state retaining 50.1% and reserving 5% for employees. This announcement supported the stock price, which appreciated by 2.85% to close at 9.52 euros, after touching a low of 9.26 euros the previous day. Trading volume was 0.56% of the capital, indicating moderate but positive activity. Despite a three-month decline of 34.42%, the stock has risen 25.06% over the year, significantly outperforming the CAC 40's gain of 9.28% over the same period. The third quarter results released in early November had disappointed the markets with an operating profit of 1.20 billion euros versus the expected 1.28 billion, leading to a 13% drop in the stock price. This underperformance was largely due to the impact of September strikes and higher-than-expected depreciation. Since then, the stock has been trading around 10 euros, well below its summer highs where it briefly exceeded 15 euros. The current consolidation comes as the group faces structural challenges, including profitability tensions at KLM and pressure on yields in transatlantic economy cabins.

Technical Analysis Indicates Potential for Short-Term Rebound

Technically, the RSI stands at 32, indicating an oversold zone that could favor a technical rebound in the short term. The MACD remains negative with a line at -0.55 and a signal at -0.39, confirming the medium-term bearish trend that has been in place since the summer. The stock is currently trading below its 50-day moving average of 11.38 euros, which now acts as a major resistance. The gap between the 50 and 200-day moving averages continues to narrow, recently moving from 2.64 euros to about 1.18 euros, indicating weakened momentum. The lower Bollinger Band at 8.73 euros provides solid technical support, while the upper resistance is at 12.56 euros, framing a relatively wide volatility zone of 18.89% over a month. The On-Balance Volume (OBV) remains deeply negative at -6.89 million, reflecting persistent capital outflows over several weeks. The Chaikin Money Flow (CMF) at -0.42 confirms this trend with negative monetary flows, suggesting that institutional investors remain cautious despite the session's rebound. The ATR volatility stands at 0.33 euro, relatively moderate given the recent turbulence in the airline sector. Notably, three net short positions representing about 0.75% of the capital remain active, reflecting some skepticism from hedge funds about the group's short-term prospects.

Strategic Importance of TAP Highlighted in Air France-KLM's Commitment

In its statement, Air France-KLM emphasizes that this move demonstrates its ongoing interest and commits to preserving the TAP brand, maintaining Lisbon as a hub, and continuing investments in the network. TAP represents a major strategic asset with its dominant position on Europe-Brazil routes and to the Portuguese-speaking African markets, which are high-growth areas. Parpública has until December 12 to evaluate the applications and report on their compliance with the requirements, opening a period of uncertainty during which the stock may experience increased volatility. The group faces a complex environment: while acquiring TAP would offer significant geographical and commercial synergies, it would occur in a financially strained context with high debt and still fragile operating margins, particularly at KLM. The target for an 8% operating margin in the medium term remains ambitious in a sector characterized by rising maintenance costs, social tensions, and the impact of new taxes in France and the Netherlands. The group's ability to consolidate its European position while improving profitability will be the major challenge in the coming quarters.