Air France-KLM may face challenges due to proposed increases in airline taxes, and it is uncertain how the airline will adjust its capacity deployment plans in the short term.
Nearly 80% of the Air France, Hop, and Transavia network could be impacted, which represents 46% of the group's overall network.
The firm maintains a "Buy" rating with a price target of €12.75. However, there is a concern that the elasticity of demand could lead to a decrease in air traffic volumes in France, potentially causing the airline to shift operations to its Amsterdam hub, Schiphol, or to operate with reduced capacity on certain French routes.