Air France-KLM ends bid for Air Europa amid focus on SAS and strong Q2 results

European airline groups have been seeking consolidation opportunities across the continent, aiming to access underserved routes and grow their market share in less saturated regions. Lufthansa recently acquired majority control of Italy’s ITA Airways and took a 10% stake in Latvia’s airBaltic. IAG, which owns British Airways, previously held plans to fully acquire Air Europa but abandoned them due to regulatory challenges; reports indicate IAG may now sell its existing 20% stake.

Air France-KLM’s focus has shifted toward SAS, citing improved financial performance and successful commercial cooperation as factors behind the decision to pursue majority ownership. The group is confident about SAS’s long-term prospects.

On July 31, Air France-KLM reported second-quarter revenues of €8.4 billion ($9.5 billion), marking a year-on-year increase of 6.2%. The operating result rose by €223 million ($254 million) compared with the same period last year, reaching €736 million ($839 million). The quarter included a €40 million impact from the Olympic Games. Unit revenue increased by 2.4%, driven by growth in both Network and Transavia segments, while overall capacity grew by 4.2%. Fuel costs after hedging dropped by 11%. The group carried 27.3 million passengers during Q2—up 5.9% from last year—with load factor stable at 87.8%.

Benjamin Smith, CEO of Air France-KLM Group, commented: “advancing premiumization, pushing the boundaries of aspirational travel with enhanced products and services, while progressing on the renewal of our fleet with next-generation aircraft.”

The group's fleet consists of more than 460 aircraft.