Air France-KLM

: equity valuation

Abstract

After the ashes have settled from the great pandemic of the 21st century, uncertainty continues to haunt airlines. The recovery of the industry, consensually aimed at the year 2024, has already caused a series of bankruptcies and threatened the sustainability of others. The present study analyses and tests the condition of Air France-KLM, one of the largest European airlines and with a history that dates back to the beginning of the 20th century. It is considered to be a major player in the Transport of Passengers and Cargo, and in the Maintenance, Repair and Overhaul business segment.For this purpose, the DCFs and Relative Valuation methods were used, supported by industry forecasts regarding future capacity, traffic, and load factors, and ending with its respective cost assessment. The macroeconomic context is firstly analysed, as well as the momentum of the industry and the idiosyncrasies of Air France-KLM. This rationale is challenged thereafter by an equity research report issued by a financial institution. In the end, the thesis suggests a price per share of €3,66, which represents a Hold in the current context.

Date of Award	29 Jun 2022
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)