AF FP

AIR France - KLM

Industrial/Transportation


Presented:08/07/2014
Price:€6.21
Cap:$2.01B
Current Price:€8.74
Cap:$2.56B

Presented

Date08/07/2014
Price€6.21
Market Cap$2.01B
Ent Value$9.01B
P/E RatioN/A
Book ValueN/A
Div YieldN/A
Shares O/S296.03M
Ave Daily Vol3,520,000
Short IntN/A

Current

Price€8.74
Market Cap$2.56B
Air France-KLM S.A. primarily provides passenger transportation services on scheduled flights. It operates through Passenger, Cargo, Maintenance, and Other segments. The company also offers freight transport services; and aeronautics maintenance services to other airlines and customers, as well as other air-transport-related activities, including catering services. In addition, it provides charter flights, as well as operates tours under the Transavia brand name. The company serves approximately 253 destinations in 105 countries worldwide. As December 31, 2012, it operated a fleet of 605 aircrafts. Air France-KLM S.A. was founded in 1919 and is headquartered in Roissy, France.

Highlights

Europe’s largest airline is trying to work through a number of issues, including a restructuring that requires additional layoffs, and increasing competition from International carriers expanding routes and low cost carriers eating away at Air France’s shorter-haul markets. The company has stated that it expects to earn an operating profit for 2013, but the presenter said the company has been “bleeding cash” in the wake of the European slowdown, and has made a number of mistakes that will likely hinder its ability to grow in the near term. Given his concerns, he likes Air France as a tactical short, and said it could even be used as a pair for long positions in better managed airlines like Delta (e.g., he suggested a 3:1 ratio of long:short could be appropriate).

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Idea Discussion

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