DAVY VIEW

New CEO Ben Smith is beginning to improve the performance of Air France (Q2 operating margin +3 points to 3.3%, although this was somewhat explained by last year’s strike). Q2 operating results were above estimates and continued execution in unit cost reduction, combined with satisfactory long-haul forward booking trends, means that 2019 guidance has been confirmed. Key decisions on fleet renewal, including the order of 60 Airbus A220s for short- and medium-haul and the accelerated phasing out of ten Airbus A380, should make the group more competitive.