Air France-KLM, the company more sensitive to fluctuations in oil

According to an analysis by Mark Irvine-Fortescue Jefferies, the Air France-KLM group is most sensitive to changes in oil prices as the company that Ryanair would suffer the least of these fluctuations.

While airlines prove under pressure and anticipate a rise in the price of fuel in case the United States engage in an armed conflict in Syria, a study reveals that Jefferies Air France KLM is the European company most sensitive to fluctuations in oil prices. Thus, the fuel bill represents 30 to 45% of total costs depending on the airline in recent adopting hedging strategies to minimize the impact of price changes. At IAG (British Airways and Iberia) and Lufthansa, the coverage reached the end of 2012 the 85% against 75% for Air France-KLM. Consequently, a 10% change in oil prices are resulting in a reduction of - 8% of profit before tax of IAG, of - 12% for Lufthansa and - 45% at Air France KLM. In contrast, according to Mark Irvine-Fortescue, the low cost Ryanair would be less exposed to fluctuations.

Fuel Air France-KLM position represented approximately 28.6% of group expenses in the first half of 2013.