2023-07-30 14:41:17
Posted Jul 30, 2023 at 4:41 p.m.Updated Jul 30, 2023 at 5:03 p.m.
Not all coincidences are unfortunate. The one that sees Air France-KLM and Renault simultaneously beat margin records is not a happy coincidence either. The parallel destinies of these historic state holdings, the worst French losses in 2020 (more than 15 billion euros between them), continue in their recovery operated by two leaders chosen from outside the tricolor seraglio.
The Canadian Ben Smith and the Italian Luca de Meo can certainly thank the tailwind of the pandemic which has given their company a forgotten ability to set prices.
But if the first can sell its tickets more expensive by a quarter on average than before Covid-19 (and by 28% in “eco” class) and if the second draws 46% more revenue per car, they also owe to their own efforts on cost and supply.
Shortfall in equity to be made up at Air France-KLM
The Air France tail runs more profitably than KLM, and Renault is no longer the albatross on the Nissan vessel. But the comparison stops with the divergence of their stock market trajectories over three years (-18% for the AF-KLM share and +65% for the former Régie).
Renault’s capital cards, opening up to partnerships, are more advantageous than those of the former air monopoly, which suffers from a hole of 2.77 billion in equity. The latter can be pleased with the appetite of private lenders like Apollo (1 billion euros in hybrids and 1.5 billion in negotiation) in exchange for coupons between 6% and 6.9%. So many future leaks in the profits cabin that will one day have to be plugged.
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