Air France-KLM has cut its capacity growth forecast for 2026 to between 2% and 4%, down from an earlier estimate of 3% to 5%, primarily due to a projected $2.4 billion increase in fuel costs driven by ongoing geopolitical tensions, particularly the Iran war.
The airline anticipates its total fuel bill will reach $9.3 billion in 2026, marking a significant rise of $2.4 billion compared to the previous year. This increase comes at a time when the airline industry faces heightened scrutiny over cost control amid fluctuating fuel prices.
In the first quarter of 2026, Air France-KLM reported an operating loss of €27 million, which, while concerning, was better than the €389 million loss that analysts had projected. KLM’s Back on Track improvement program notably contributed €159 million in savings during this period.
KLM CEO Marjan Rintel remarked that the ongoing geopolitical uncertainty and sharply increased fuel prices will exert pressure on results starting in the second quarter. Additionally, Bas Brouns, another executive at KLM, indicated that the airline cannot fully transfer these high fuel prices to customers without impacting profitability.
Concerns about potential disruptions in vital shipping routes, such as the blockage of the Strait of Hormuz, have pushed Brent crude prices to a four-year high of $126 per barrel. This situation adds another layer of complexity for airlines attempting to navigate through rising operational costs while maintaining competitive pricing for consumers.