Ladies and gentlemen, dear shareholders. First of all, I would like to thank you for being here today, and I would like to welcome you to this annual meeting, which is very important for us and that you're all expecting. This general meeting holds a very special significance for me today. This is, in fact, the first time that I have the honor of chairing it as chair of the Board of Directors of Air France-KLM. It is a great honor, and I fully appreciate the responsibility that has been entrusted to me. I would like to once again express my gratitude to Anne-Marie Couderc for all the work that she's accomplished during her seven years as chair of the group, particularly during periods of unprecedented turbulence. It's a strong group, united and resilient, that she contributed to build, and I am committed to continuing to grow it.
The year 2025 was a remarkable year, marked by successes and landmark milestones for Air France-KLM, whose results reflect the progress achieved thanks to the exceptional dedication of all of our teams. Our revenue increased by 4.9% compared to 2024, and our operating income reached EUR 2 billion, with an operating margin of 6.1%. We achieved this performance together thanks to all our business segments, passenger transport, cargo transport, and our aircraft maintenance business. Last year, Air France-KLM and Transavia carried more than 100 million passengers. In cargo, the Air France-KLM-Martinair Cargo teams successfully met the strong demand on key routes, particularly between Asia and Europe.
In maintenance, Air France Industries KLM Engineering & Maintenance successfully adapted its services for the airlines of the group, as well as for its customers throughout the world, securing numerous new contracts and generating double-digit growth for the full year 2025. At the same time, Flying Blue celebrated its 20th anniversary in 2025, a wonderful opportunity to celebrate a program that has once again recognized as one of the best loyalty programs in Europe and which has surpassed the 30-million-member milestone. All these achievements are all the more remarkable that we operate in a geopolitical environment that remains particularly complex. In 2025, the conflict in Ukraine has dragged on, continuing to weigh on our operations with the ongoing closure of the Russian airspace. Added to this is the continued closure of certain regions in Africa, as well as the inability to serve countries such as Mali or Burkina Faso.
As we begin 2026, the conflict in the Middle East marks a further deterioration of this environment, with persistent instability that affects some of our own routes, driving up fuel costs, and creating operational uncertainties that we continue to manage with vigilance and agility. These economic factors have weighed on our costs and revenues, but I am confident in our resilience and our ability to overcome them. In 2025, we have also made progress in implementing our strategy to move upmarket. The improvement in the customer experience has been rolled out across all airlines: new cabins, high-speed Wi-Fi on board, and redesigned lounges around the world. At the same time, we made significant strides in sustainability and sustainable development. Our decarbonization action plan is yielding tangible results. By the end of 2025, our fleet was composed of nearly 35% new-generation aircraft and will reach 80% by 2030.
Furthermore, we used twice as much sustainable aviation fuel in 2025 as in 2024, a progress that illustrates our group's determination to continue playing a leading role in the environmental transformation of the aviation sector, even though there is still a long way to go. The year 2025 also provided an opportunity to prepare actively the consolidation of European air transport. Air France-KLM has strengthened its commercial partnership with SAS, which is already contributing positively to the group's financial results. Building on this momentum, our group has announced its intention to initiate the process aimed at acquiring a majority stake in the airline. Beyond SAS, we are pulling out all the stops to seize all the consolidation opportunities in Europe. Our ambition is clear: to play a leading role in the sector's evolution, while creating new prospects for sustainable growth for the group and for our customers.
To close, dear shareholders, I am proud to rely on the commitment of the group and the group's 80,000 employees and team members, and to work alongside the team led by Benjamin Smith, whose dedication has enabled Air France-KLM to reclaim its position as a European leader. You can count on the dedication of the men and the women who bring this group to life, and Air France to life, as well as the full commitment of the members of the board of directors and the executive team. Thank you. I will now present to you the procedures to constitute the Bureau of the Assembly, which I will be chairing. Mr. Arthur Faust, maybe you may want to stand up so we can see him. He represents the French State Holding Agency, and Ms. Linda van Schijndel, who represents the Dutch State. Thank you.
They have agreed to serve as scrutineers. I thank them for this. Lucie Muniesa, our General Secretary of the Group, and she will serve as the secretary of our meeting today. The statutory auditors, Valérie Besson, Eric Dupré, Amélie Jeudy de Grissac, and Philippe Vincent, who is behind, are also present. Valérie Besson will present the report on behalf of the board of the statutory auditors. As is customary, we have engaged a court officer to certify the validity of the meeting. I now turn the floor over to Lucie Muniesa for the formalities.
Thank you, Madam Chair. I can confirm that the legal formalities have been completed. The notices of meeting and the notices of convening were published on April 27th and May 15, 2026, respectively. All documents required by law are available at the front desk and on our website. They have been made available to shareholders since the notice of the meeting was issued, and I suggest that we not list them. You may already consult the responses to the written questions submitted prior to the meeting, which are published on our website. Finally, I would like to inform you that we have not received any requests to add resolutions or items to the agenda. A review of the attendance sheet shows a provisional quorum of 63.354%, confirming that the legal quorum, one-fourth of the shares entitled to vote, has been reached.
The general meeting is therefore duly constituted and may validly deliberate on both ordinary and extraordinary matters. The final quorum will be determined at the start of the vote on the resolutions. I now give the floor to Florence Parly to continue our meeting.
Thank you, Lucie. I hereby declare that the meeting is duly constituted and may validly deliberate, and I propose that we do not read the full text of the board of directors report, the resolutions, and the auditor's report, which have been made available to you. Regarding now the agenda for our meeting, Lucie Muniesa will first provide a summary of the resolutions submitted to your vote. Our chief executive officer, Benjamin Smith, will present to you the group's activities during the 2025 fiscal year, the strategic priorities of Air France-KLM, as well as the group's CSR strategy and the actions taken in this regard over the past year. Our chief financial officer, Steven Zaat, will then present the financial results for the year 2025.
Following their presentations, I will outline the work related to the group's governance, Alexander Wynaendts, Chairman of the Compensation Committee, will provide an update on the compensation of the executive officers. I will then invite Madam Valérie Besson, representative of the board of the statutory auditors, to present their report. Finally, we will answer your questions with Anne Rigail and Marjan Rintel before proceeding to the vote on the resolutions. I now give the floor to Lucie Muniesa, who will now sum up the resolutions submitted for your vote.
Thank you, Madam Chair. I will now present the resolutions, the details of which are included in the meeting notice brochure available on our website. First, under ordinary business, resolutions one to three concern the approval of the company and consolidated financial statements for fiscal year 2025 and the appropriation of earnings. Resolution four concerns the approval of a regulated agreement. Resolutions five to seven concern the renewal of directors' terms of office. Resolutions eight and nine concern the acknowledgement of the expiration of the term of office of KPMG as statutory auditor responsible for certifying financial information, as well as sustainability-related information and the appointment of Deloitte & Associés to replace KPMG in the same capacity. Resolutions 10 to 16 concern the ex post vote on the compensation of corporate officers for the year 2025 and the ex ante vote on the compensation policy for 2026.
Resolution 17 concerns the authorization granted to the board of directors to trade in the company's shares. Let us now turn to the extraordinary resolutions. Resolutions 18 and 19 concern the proposal to grant financial authorization for capital increases reserved for group employees who are members of a company or group savings plan, Resolution 18, and for employees of the group's foreign subsidiaries, Resolution 19. Resolution 20 concerns the authorization granted to the board of directors to reduce the capital by canceling treasury shares. Resolution 21 concerns the ratification of the amendment to Article 30 of the articles of association regarding the update of the record date for the general meeting of shareholders following the latest regulatory changes, and Resolution 22 concerns the powers required to complete the necessary formalities.
Thank you very much, Lucie. Before handing the floor over to Benjamin Smith, I suggest we take a look back at the highlights of 2025 through a very short video. I will now hand the floor to Benjamin Smith, our Chief Executive Officer, so he can present to you the group's performance during the 2025 fiscal year and discuss the strategy and the outlook of the group.
Okay. Good afternoon, ladies and gentlemen, and dear shareholders. It's a pleasure to be with you for this annual general assembly. Today, I will share the Air France-KLM Group's 2025 results, walk you through our key strategic achievements, outline our upcoming priorities, and of course, answer your questions. Let me begin by emphasizing that we are executing our strategy and consistency, and all this is done with discipline across all pillars, and that this focus is translating into tangible, encouraging results. In a nutshell, in 2025 and beyond, we continue to reinforce our market position, notably through our proposed increased stake in SAS Scandinavian Airlines System, which would, subject to government approval, strengthen our footprint in the Nordics and enhance connectivity to key North American and Asian markets. Financially, we continue to improve profitability.
In 2025, our operating margin reached 6.1%, reflecting robust revenue generation and rigorous cost control. Our brands remain a global benchmark for excellence. For the fifth consecutive year, Skytrax named Air France the best airline in Europe. This prestige is matched by the commitment of our teams. Our employee promoter score has risen by 33%, a proof of the benefits of our social strategy, driving the engagement of all colleagues. Finally, sustainability remains the cornerstone of our transition plan. Fleet renewal is our primary lever, with next generation aircraft now representing over 35% of our fleet, supported by SAF blending levels that significantly exceed regulatory requirements. In 2025, Air France-KLM delivered strong execution in a demanding environment. Group revenue reached an all-time high of EUR 33 billion, which is up 4.9% year-on-year.
The operating results stood at EUR 2 billion, which is an improvement of EUR 400 million over 2024, and the highest in our history. We carried nearly 103 million passengers, surpassing the 100 million mark for the first time since the pandemic. These figures demonstrate that our disciplined execution is translating into a structurally stronger financial performance. Many of you have been shareholders for years and know that our long-term vision required firm strategic decisions. We have modernized our fleet, reducing the number of aircraft types across the group almost by half to unlock powerful group-wide synergies and ensure product consistency, as demonstrated by the successful rollout of KLM's Premium Comfort cabin. This action, along with redefinition of our customer promise, allowed us to become more harmonious in addressing customer expectations and better aligned with the modern standards across all group brands.
A personal priority of mine has been stabilizing and enhancing social dialogue. The road has at times been challenging, it has resulted in the trustworthy, healthy relationships we see today. I'm incredibly proud of this progress and remain committed to maintaining this spirit of partnership. These initiatives form the bedrock of our transformation, optimizing our cost base, and securing the pathway toward our long-term operating margin target of 8%. Fleet modernization remains our top priority. For value creation, which includes the integration of the Airbus A320neo family at KLM and at Transavia, which delivers superior experience while significantly reducing our environmental and noise footprint. At the top of the market, we continue to redefine luxury. The 2025 Air France unveiled its new La Première experience, which is the ultimate expression of French sophistication.
On that occasion, we revealed our plan to make this exclusive product available on more aircraft and on more routes, confirming our commitment to the luxury segment. We have also enriched our long-haul offering through premium content partnerships with Canal+, Apple, and the introduction of free high-speed Wi-Fi at both KLM and Air France. On the ground, our new and refurbished lounges in Chicago and Boston offer an elegant environment anchored in our signature hospitality. These touchpoints strengthen the prestige and appeal of our brand across the world. In line with our global strategy, our cabin mix is shifting toward higher value segments, and by 2028, nearly one in four seats across our long-haul fleet will be in a premium cabin. At Air France, the share of La Première and business seats will reach 14% by 2028.
At KLM, the business segment will grow to 11%, while the Premium Comfort cabin is expected to expand to 9% of total seats. This represents a striking growth in premium capacity, 40% for Air France and 116% for KLM in comparison with our 2022 positioning. Combined with stable load factors, this structural shift significantly improves the quality of our revenue. Flying Blue, our loyalty program, which now unifies the customer experience across all our airlines, including Transavia, recently celebrated its 20th anniversary. It has evolved into a leading loyalty program with over 30 million members, a number that is almost double since 2022. With 40 airline partners and over 100 commercial partners, the program is now embedded in our members' daily lives. This scale creates a powerful impact. In 2025 alone, members donated 1.2 billion miles to NGOs.
Named best airline loyalty program by point.me for the second year running, Flying Blue is a cornerstone of our strategy, driving retention and long-term value creation for each and every one of our customers. In parallel to our commercial tracks, our sustainability journey is underpinned by disciplined investment. With over one-third of our fleet now comprised of new generation aircraft, we are consuming less fuel and reducing our CO2 and noise footprint. Simultaneously, our SAF blend reached 2.9%, which is well above regulatory mandates. For those of you following the subject, and as you already might know from the news, these efforts are recognized externally. We were awarded a gold medal by EcoVadis, placing us in the top 2% globally, and our CDP climate rating improved from B to A. Collectively, these achievements demonstrate measurable progress and reinforce Air France-KLM's position among the leaders in sustainable aviation.
Looking ahead, our ambition for our airlines is very clear: to be the best in their respective market segments. At Air France, the best premium airline in Europe. At KLM, the best innovative airline in Europe. With Transavia, the best low-cost airline in Europe. The historic positioning of Air France has always been rooted in l'élégance à la française. As we look forward, we are pushing the pinnacle of this identity even higher across every cabin, which is all the way from La Première to Economy. Our strategy for Air France rests on four uncompromising pillars. We are accelerating the rollout of our latest cabin interiors to ensure a consistent, elegant French experience across the entire long-haul fleet. We're also focused on reducing service failures and improving cabin condition, and cleanliness ensuring it matches our brand promise.
We are investing in crew training to deliver a more personalized, intuitive service that anticipates passenger needs. We recognize that for the premium traveler, time is the ultimate luxury. On-time performance and reliability remain our top operational priorities to ensure smooth operations, notably at our Air France hub at CDG. KLM heritage is one of pioneering spirit, and that heritage dictates into its future. We are positioning KLM as the most innovative airline in Europe, leveraging its unique experience in a highly competitive global landscape. To achieve this, we are building on three historic strengths. As the original architect of the modern global hub-and-spoke system, KLM continues to optimize connectivity, ensuring we remain the most efficient bridge between Europe and the world. KLM has always been at the forefront of airline partnerships.
We are beginning a new level of sophistication to our joint ventures and European consolidation tracks to maximize network reach. We're adopting a customer-first digital vision at scale by integrating AI and advanced data analytics across all touch points, and we're transforming tech requirements into future commercial opportunities that personalize the journey for every traveler. Moving on to Transavia, I want to reaffirm our commitment to building the leading low-cost airline in Europe, and I'm confident our teams now have all the necessary attributes to make this a reality. Our roadmap for Transavia is focused on two key drivers. Transavia's cost structure remaining highly competitive as we continue the ongoing ramp-up of operations in our primary bases, the Netherlands and France. We will achieve further economies of scale and operational maturity.
Unlike traditional low-cost rivals, Transavia benefits from the power of Air France-KLM, the entire group, and by integrating the Flying Blue loyalty program and leveraging our cross-group commercial expertise, we're improving revenue quality and building a unique competitive edge that point-to-point rivals cannot match. Our non-passenger businesses, engineering and maintenance and cargo, remain indispensable contributors to the group's financial health and operational stability. As we continue to invest for the long-term growth, Air France-KLM's E&M is a global powerhouse in the MRO, maintenance, repair, and overhaul sector. We're focused on two strategic imperatives. Our internal priority remains absolute, delivering the highest standards of safety and technical reliability to keep our group's aircraft in the air and generating revenue. Beyond our own fleet, we're strongly expanding our third-party business by leveraging strategic joint ventures with partners like Airbus, AerCap, and AAR, in addition to Safran.
We are securing our leadership in the maintenance of new generation engines and components, turning our technical expertise into a diversified revenue stream. On the cargo side, we're transitioning from a traditional carrier to a digitally integrated logistics leader. We're investing to win in a high yield, fast-paced global market. Through our flagship projects, One Roof in Amsterdam and G1 XL 2030 in Paris, we are radically modernizing and simplifying our ground operations. These state-of-the-art facilities will drive efficiency, reduce costs, and accelerate processing times. Our digital-first approach is a game changer by providing customers with seamless booking and total real-time transparency. We are increasing our agility and ensuring we remain the preferred partner for high-value, time-sensitive global trade. We said it before, to be a true global leader, Air France-KLM must secure a leadership position across the key European markets.
We are moving to a truly integrated Pan-European network, taking an active and disciplined role in the consolidation of our industry. Our acquisition of a stake in Scandinavian Airlines, SAS, initially at 19.9% with a path toward a 60.5% controlling interest, is a transformative milestone. This move already provided us with immediate access to the high-yield Nordic market. By fully integrating SAS into our network, once again, subject to regulatory approval, we will significantly enhance our traffic mix and create new efficient flows between Northern Europe and our global hubs in Paris CDG and Amsterdam Schiphol. As you've likely seen in recent news, we remain highly focused on TAP Air Portugal. Our strategic rationale here is definitive.
Lisbon positioning as the premier gateway to Latin America, a region which had an exceptional growth potential, would make it a very valuable addition to the group. Lisbon could become the group's unique South European hub, competing and complementing our existing global gateways. We're working closely with all key stakeholders to make this acquisition a reality. It represents the final piece of our European geographic puzzle, ensuring Air France-KLM has a strong north-south axis that covers the most profitable long-haul corridors in the world. This privatization process is expected to end this summer, meaning we will very soon know if this vision can materialize. Taking a step back at our M&A strategy, these are not just investments in airlines, they are investments in strategic sovereignty, ensuring our group remains a key architect of European aviation. Finally, we must address the challenges ahead.
The conflict in the Middle East has created a highly complex environment for international travel, disrupting global flows and introducing airspace constraints and higher fuel costs. In this context, our group has demonstrated remarkable agility. With only 2% capacity in the region, we swiftly reallocated aircraft to avoid underutilization. A diversified network allowed us to move capacity to markets with stronger demand, notably in Asia. By rerouting long-haul flows through Paris and Amsterdam, we captured rising yield in the strong context of supply-demand imbalance. While we are resilient, the situation remains very fluid. We anticipate that higher fuel prices will not be fully recoverable in the coming quarters of 2026. As we confront the challenges of tomorrow, we must look clearly at a structural trend affecting not just Air France-KLM, but the entire European aviation sector.
The erosion of our collective market share and the gradual offshoring of European aviation. If we look at the data spanning the last two decades, from 2005 to 2025, the shift is undeniable. European legacy airline groups are losing ground on two fronts. On short and medium-haul networks, our historic market share has contracted by an estimated 12 points, driven by the aggressive expansion of point-to-point low-cost carriers such as Ryanair and easyJet. Simultaneously, on long-haul networks, the traditional engine of our profitability, European network carriers have seen a collective market share erosion of more than 15 points. This traffic is increasingly being diverted through the massive connector hubs of Turkish Airlines and of the Gulf carriers such as Emirates, Qatar Airways, and Etihad. This is not merely a challenge of commercial competition.
It is a fundamental shift in the center of gravity of global aviation, heavily influenced by asymmetrical operational conditions. Faced with this reality, Air France-KLM is actively advocating on every level, local, national, and international, for an industry-wide transformation to ensure a true global level playing field. Both in France and the Netherlands, we are engaging constructively on critical local issues. This includes addressing upcoming budgets, collaborating on proposals like the ADP-Air France Joint Connect France initiative, and navigating Schiphol Airport's charges and aviation tax projects, always while pushing for smart decarbonization incentives that reward progress rather than penalizing European hubs. At the EU and international level, we're calling for a new EU aviation strategy specifically designed to improve the level playing field between European and non-European carriers, alongside a necessary reform of passenger rights under the EU 261.
Furthermore, we are demanding fair and balanced traffic across all agreements, reevaluating frameworks like the EU-Qatar Agreement, and advocating for a global carbon reduction diplomacy. European airlines cannot be the only ones bearing the financial weight of environmental regulations while our international competitors operate without similar constraints. These priorities are made particularly critical by the current context, which puts our industry under increased pressure. To secure a sustainable and respected future, competition must remain fair. Air France-KLM will continue to lead this dialogue to protect our sovereignty and our growth. I want to thank our employees, many who are in the room today, our customers and our shareholders, as well as our partners. Your commitment, trust, and support allow us to act with the long-term vision necessary to ensure that Air France-KLM remains a leader of the aviation industry, proudly based in Europe. Thank you very much.
Thank you very much, Ben, for the very clear presentation and for telling us about the context for the Group. Now, I will give the floor to our CFO, Steven Zaat, who will present to us the financial results for the Group in 2025. Steven, you have the floor.
Madame La Presidente, Madame Monsieur, dames en heren, ladies and gentlemen, good afternoon. It is with great pleasure that I stand before you today at this annual general meeting to present the financial performance of Air France-KLM for the year 2025, and to share with you our outlook for 2026 and our midterm guidance for 2028. Every year, this moment is an important opportunity to reflect together on our progress, our challenges, and the path forward, and this year is no exception. Last year when I stood here, I described a year marked by considerable headwinds, operational disruptions, and the impact of the Olympic Games that weighted heavily on our results. We closed 2024 with determination and clear commitment to turn that page. Today, I'm pleased to share that 2025 was a year of strong execution, disciplined steering, and financial strength for our group.
We delivered a record operating result, simplified further our balance sheet, invested in fleet renewal, and continued our transformation that will shape our future. This performance is the result of the relentless effort of our teams across the world, on the ground, in the air, and in our support functions. Let me take you through our key achievements. In 2025, Air France-KLM welcomed nearly 103 million passengers, an increase of 5% versus 2024, and revenues rose to EUR 33 billion, an all-time high for our group. The most remarkable achievement is our operating result of EUR 2 billion, up EUR 400 million versus 2024. This is the highest operating result ever delivered by Air France-KLM, reflecting both strong commercial and operational performance and our ability to control our cost. During 2025, we reimbursed again EUR 500 million of COVID debt related to social charges and wage taxes.
Corrected for these payments, the recurring adjusted operating free cash flow improved by more than EUR 700 million and amounted to EUR 1 billion. This underlying positive free cash flow shows our cash flow generation capability from our business and supports our target for substantial operating free cash flow delivery. Our net income stood at EUR 1.8 billion following our improved operating result. The stronger euro compared to the US dollar supported the net result as well. This improved net result contributed to our IFRS equity, which amounted to EUR 2.4 billion. Last but not least, we closed the year with a leverage ratio of 1.7 x, in line with the group's ambition of between 1.5 x- 2 x. Let me walk you through the performance of our businesses. Passenger network revenues increased by 4%, supported by capacity growth and strong demand in the premium classes on the long routes.
Cargo revenues remained broadly stable year-over-year. Both activities together resulted in a strong increase in our network operating results to EUR 1.8 billion, achieving a margin of 6.5%, getting closer to our 2028 ambition of more than 8% margin for the group. This performance reinforced our conviction that focusing on premium cabins and operational reliability is the right strategy. Transavia grew by 12% in revenues. The temporary effects of the transfer of Air France operations in Orly to Transavia and the move from Boeing fleet to Airbus fleet for Transavia France and the Netherlands weighted on the unit revenues and operating results. On top, we had additional Schiphol charges and the so-called TSBA tax in France, which weighted heavily on this activity. Our maintenance business delivered another year of profitable growth, with operating income of EUR 267 million and a margin of 4.8%.
Continuous demand of engine and component services increased our order book in 2025 by $2 billion to almost $11 billion. This improved order book will drive our third-party revenues in the coming years. Beyond operational and commercial results, 2025 was also a year of financial strengthening of our balance sheet. We continued to simplify our balance sheet with several actions. The full redemption of the hybrid convertible bond of EUR 300 million and the first Apollo hybrid of EUR 500 million.
A successful EUR 650 million senior bond issuance in January 2026 at a 3.9% coupon, with the lowest spread ever achieved by Air France-KLM. We will continue to reduce the hybrid stock in our equity by strengthening it through our net result generation in the next years. On top, our cash at hand remains stable at EUR 9.4 billion. Well above our targeted liquidity levels of EUR 6 billion-EUR 8 billion.
Let me now briefly touch on the SAS transaction. As announced in July 2025, we are progressing towards the consolidation of SAS into the group in the second half of 2026. After regulatory approvals, our stake will be 60.5%, and the Danish state will own 26.4%, and the other shareholders, as a result of the Chapter 11 process, will own the remaining 13%. Once SAS is part of the Air France-KLM Group, synergies will be unlocked, for instance, enhanced loyalty, customer value, extended partnerships, complementary networks, but also cost benefits due to the economy of scale and lower finance costs. Turning to our outlook for 2026, given the geopolitical issues in the Middle East, we have slightly adjusted our 2026 outlook. We expect group capacity still to grow 2%-4%.
This growth is driven by 2%-4% long-haul capacity growth, stable short and medium-haul capacity, and growth of circa 8%-10% by Transavia. Unit costs are expected to be between 0% and +2%, including the 0.5 unit cost uplift linked to the cabin premiumization. Unit cost control will be the central key item in our company. Despite the reduction in capacity, we are confident that we can maintain our initial guidance. To protect our cash flow, we have adjusted our net CapEx guidance to below EUR 3 billion, with approximately 80% dedicated to fleet renewal and fleet-related investments. Our leverage guidance remains between 1.5 and two, consistent with our commitment to financial discipline. Looking further ahead, I would like to repeat our midterm financial ambition for 2028.
Our goal is to reach an operating margin above 8%, a significantly positive adjusted operating free cash flow after years we were hampered by paying back the social charges and the wage tax of COVID. A reduction in unit costs driven by simplified operation, transformation programs, and fleet renewal, and an investment-grade profile. These ambitions are supported by every entity within our group and represent a collective commitment to long-term sustainable value creation. Before closing, I want to address our shareholders directly. A large part of the shareholders' base consists of individual shareholders. If you own at least five shares, you could register yourself as a member of the Individual Shareholders Club. This club has 4,000 members and is still growing. The members receive on a regular basis newsletters, and private events have been organized.
We renewed in February 2023, the Individual Shareholders Committee, the CCAI, with 10 new members who meet the Air France-KLM management regularly. In 2026, two new members joined the committee. We will introduce the members of the CCAI during the Q&A session. If you haven't registered yourself to the club yet, please visit our website. In December 2023, the group has offered shares to the employees in 20 countries. In total, 17,000 colleagues have participated in this employee share plan, which was 22% of the total workforce of Air France-KLM at that time, bringing the total employee shareholding to 4%. We are happy with their confidence and commitment to our trajectory and having our colleagues in the group's shareholding. Your trust, your loyalty and your engagement continue to inspire us, and we are sincerely grateful for the confidence you place in Air France-KLM.
To conclude, 2025 was a year of record operating result, disciplined execution, and strategic progress. 2026 is a year which started with EUR 90 million negative impact due to the severe winter weather, mainly in the Netherlands. Even worse, the rising fuel price due to the geopolitical issues in the Middle East has an impact. However, it is good to realize that our hedging policy is partly protecting us, and we are now in a more resilient shape than in our past. Our ambition and strategy will continue to drive value for the company and you as a shareholder. I want to express my heartfelt thanks to our employees, customers, partners, and of course, to you, our shareholders. Your support is essential, and we are determined to continue delivering on our commitments. Thank you very much for your attention.
Thank you, Steven. I will now present the group's governance structure before handing the floor to Alexander Wynaendts, who will discuss executive compensation for the administrators. As you know, since 2018, our governance has been based on the separation of the roles of the Board Chair and the Chief Executive Officer to ensure a clear division of the respective responsibilities. At the board level, our work is supported by four specialized committees that play an active role in preparing all the sessions of the board meetings. The Audit Committee, composed of six members and chaired by Isabelle Guichot. The Sustainability and Compliance Committee, composed of eight members and chaired by Anne-Marie Idrac. The Compensation Committee composed of six members, chaired by Alexander Wynaendts, and the Nomination and Governance Committee composed of three members, which I chair. It should be noted that all of these committees are chaired by independent directors.
Your Board of Directors and committees have been highly engaged, demonstrating a sustained commitment and a high level of availability next to the Senior Management. This commitment was decisive in making major decisions in 2025 and early 2026, both in terms of governance and strategic decisions, enabling the Group to meet its challenges and to prepare the future while keeping sustainability issues at the heart of its priorities. In this context, the Board was particularly involved in the Group's consolidation and transformation projects, the monitoring of strategic operations, key CSR issues, and the preparation for the renewal of certain executives' terms of office. As you can see, this period was marked by strategic decisions that are significant to enable the Group to consolidate its positions. First, the decision to acquire a majority stake in SAS, which remains subject to regulatory approvals.
Additionally, the submission of a non-binding offer to acquire a minority stake in the capital of the airline TAP. On governance matters, the board of directors approved the renewal of the term of office of Marjan Rintel, chair of the executive board and CEO of KLM. It has also appointed me as Chair, effective upon the conclusion of the annual general meeting of June 4, 2025, and subject to the vote being put to you today, until the conclusion of the annual general meeting of 2030. Finally, since March 2026, the board of directors has been giving particular attention to the impact of the crisis in the Middle East on our group. Now, let's turn to the composition of our board. In 2025, the board continued to prioritize the appointment and reappointment of directors who have a proven record in executive management, gained with major French and international groups.
As of 31st of December 2025, there were 19 directors, including seven independent directors, 46% women, excluding executive directors, four directors that represent employees and employee shareholders. Your board brings together a panel of diverse and complementary skills and experience, and is also rich with new members. In 2025, we're pleased to welcome four new directors: Qingchao Wan, Véronique Penchienati-Bosetta, Isabelle Guichot, and Pierre Lichon. Let's turn to the changes in the board composition that will be submitted for your approval. In 2026, three directors' terms will expire. We'll first submit for your meeting's approval the reappointment of two directors who represent the employee shareholders, and who were appointed during the group's wide elections held last January, and whose terms are expiring. Namely, Michel Delli-Zotti, who represents the employees and former employee shareholders who are airline pilots, for a term of four years.
Nicolas Foretz, representative of the ground staff and cabin crew employee and former employee shareholders, for a duration of four years. Finally, having been co-opted for a term that is rapidly coming to an end, my term as a director also expires at this general meeting. It is proposed to you to renew it for a term of four years, I need to clarify that the board of directors has decided to renew my role as chair for the duration of this term, subject to your approval, of course. I would like to now invite Alexander Wynaendts to join me so he can present to you the compensation proposal that will be put to your vote.
Thank you, Florence. Dear shareholders, good afternoon. I move along in French. In my capacity as chairman of the board of the directors' remuneration committee, I would present to you the main elements of the remuneration of corporate officers for 2025, as well as the remuneration policy adopted by the board for the year 2026. These details are set out in chapter two of the 2025 universal registration document and will be put to vote in Resolutions 10 - 16. Let us begin with the remuneration of the board for 2025. The total remuneration for the directors for 2025 amounts to EUR 1,393,500. It was determined by the board of the directors within the limits of the annual budget of EUR 1,550,000, and in accordance with the remuneration policy approved by your annual general meeting last year.
Let us now turn to the 2025 remuneration for the Chair of the Board of Directors and of the Chief Executive Officer. I would remind you that the term of office of the Chair of the Board of Directors, Anne-Marie Couderc, came to an end following the Annual General Meeting or Assembly on the 4th of June 2025, on which date Florence Parly succeeded her in these duties. In accordance with the pro rata remuneration policy for the period from January 25 to the 4th of June 2025, the Chair of the Board of Directors received a fixed annual remuneration of EUR 150,000 and did not receive any variable remuneration. The Board of Directors had also decided that the remuneration policy for the Chair of the Board for the 2025 financial year would apply to the future Chair on a pro rata basis.
For the period from 4th of June to the 31st of December 2025, the Chair of the Board of Directors received an annual fixed remuneration of EUR 201,289 and received no variable remuneration. As regards the Chief Executive Officer, the remuneration paid to him in 2025 comprised the following components: a fixed remuneration of EUR 1,044,000, annual variable remuneration of EUR 1,594,760 for the 2024 financial year, long-term variable remuneration corresponding to 72,922 performance units under the 2022-2024 long-term plan, for which a three-year performance rate stood at 59.5%, amounting to EUR 721,490.
The remuneration awarded for the 2025 financial year comprises the following components: a fixed remuneration of EUR 1,044,000, annual variable remuneration of EUR 1,753,920, representing 168% of the fixed remuneration calculated based on the chosen trades of the targets set out in the remuneration policy approved by last year's annual general assembly, and long-term variable remuneration corresponding to 232,558 performance units payable in shares under the 2025-2027 long-term plan, valued at EUR 2 million and subject to performance and attendance conditions over a three-year period.
More specifically, the annual variable remuneration awarded for 2025 was calculated based on the performance against the criteria detailed in the table displayed on screen. The performance of the quantitative criteria related to the group's financial targets amounted to 96% of the fixed remuneration, and the portion related to criteria linked to the group's non-financial objective or extra financial objectives was set at 72% of fixed remuneration.
That is a total 168% of fixed remuneration. Let us now move on to the remuneration policy for 2026. For 2026, it is proposed that the total remuneration budget for directors be maintained at EUR 1,550,000, and that the allocation rules as approved at last year's annual general meetings remain unchanged. This amount will thus be allocated amongst the directors while continuing to apply a fixed component and a variable component based on attendance. The board has also decided to maintain the remuneration policy for the chair as approved by recent general assemblies, namely a fixed annual remuneration of EUR 350,000. No variable remuneration component is provided for.
With regards to the Chief Executive Officer, the Board of Directors has decided to maintain the remuneration policy approved at last year's general assembly largely unchanged, namely a fixed remuneration of EUR 1,044,000, annual variable remuneration of 150% of the fixed remuneration if targets are met, and a maximum of 180% of the fixed remuneration if targets are exceeded. A long-term remuneration subject to the fulfillment of demanding performance conditions requirements assessed over a three-year period, the amount of which has remained unchanged since 2018, totaling EUR 2 million. A supplementary pension scheme introduced in 2024 would be maintained. Annual variable remuneration will be assessed on the basis of performance criteria linked to financial targets to 60% and non-financial targets 40%, half of which are linked to the decarbonization action plan.
As part of the ongoing dialogue between the company and its shareholders, certain adjustments have been made to improve transparency in the assessment of the individual performance and leadership criterion. This will be assessed partly on the basis of a qualitative assessment and partly on the basis of a quantitative assessment. The Chief Executive Officer will receive long-term variable remuneration of an enhanced amount of EUR 2 million, payable in shares and subject to the fulfillment of demanding performance conditions assessed over a three-year period. The performance conditions of the 2026-2028 long-term plan focus on the group's performance, with CSR performance targets accounting for a significant proportion.
Certain adjustments have been made to the definition of the assessment criteria in order to take full account of the expectations expressed during the shareholder dialogue. Thank you, dear shareholders, for your attention.
Thank you, Mr. Chair. I would like to thank you for this session on governance and compensation. Now I would like Valérie Besson, who represents the Board of Statutory Auditors, to present to us their report.
Thank you, Madam Chair, ladies and gentlemen, shareholders, good afternoon. On behalf of the Board of Statutory Auditors, KPMG Audit , I have the honor of reporting to you on the engagement entrusted to our court for the 2025 fiscal year are included in the notice of the general meeting, as well as in the 2025 universal registration document. We have issued seven reports, a report on the annual financial statements, a report on the consolidated financial statements, a report on regulated agreements, three reports relating to capital transactions, and a report certifying sustainability and taxonomy disclosures. As is customary at this meeting, I would like to present the key points of these reports to you. I will begin with our report on our group's annual and consolidated financial statements. They can be found on pages 499-502 and 473-478 of the universal registration documents, respectively.
The purpose of our work on the consolidated and annual financial statements is to provide reasonable assurance that the financial statements are free from material misstatements. Our reports highlight the key findings of our audit, which represent the matters we considered most significant informing our opinions. For the consolidated financial statement, there are three key audit matters, the recoverability of aviation assets, the recognition of deferred tax assets of the French tax group, and the recognition of revenue from transportation tickets issued and not used. With respect to the annual financial statements, we considered the valuation of equity securities and related receivables to be the key focus of our audit. Your company's audit committee and board of directors were kept regularly informed of our work. In conclusion, we have issued an unqualified opinion on your company's annual financial statements and the group's consolidated financial statements.
Our report on the annual financial statements includes a technical observation regarding the first-time application effective January 1, 2025 of ANC Regulation 2022-06 on the modernization of financial statements. Our third report is on regulated agreements. It can be found on pages 503-507 of the universal registration document. We have been notified of an agreement entered into during the fiscal year 2026 that was subject to prior authorization by your board of directors during the 2025 fiscal year. This agreement concerns the signing of an amendment to the joint venture agreement between Air France-KLM, Delta Air Lines, and Virgin Atlantic Airways. This agreement is submitted for your approval under the fourth resolution. Our report also mentions the agreements entered into and previously approved, the performance of which continued during the fiscal year. We have no comments to make regarding the fourth resolution.
Regarding our report on capital transactions, we have issued three reports. They can be found on pages 50 through 53 on the notice of meeting, that pertain to resolutions 18, 19, and 20, authorizing transactions that may affect your company's capital. These reports contain no specific comments or observations. We will prepare additional reports if necessary when your board of directors exercises these authorizations. I will conclude with our report on sustainability disclosures and taxonomy. It can be found on pages 356 through 359 of the universal registration document. Our limited assurance report covers compliance with the ESRS and European regulations regarding the process implemented by Air France-KLM to determine the disclosures published. Second, the sustainability information included in the sustainability statement. Third, the taxonomy. Based on the procedures performed, we did not identify any material errors, omissions, or inconsistencies regarding compliance with the ESRS and European regulations.
Part three of our report includes a technical observation related to the requirements on the DNSH pollution criterion as presented in paragraphs 4.2, 4.4, 4.5 of the sustainability statement. Madam Chair, ladies and gentlemen, shareholders, I thank you for your attention.
Thank you very much, Madam Statutory Auditor. Let me thank you in this particular moment for the amazing work that has been done by all of the KPMG team who have been supporting the group for the last 24 years. Your dedicated commitment has always been supporting our team, particularly throughout the multiple crises that we've faced together. It has been absolutely appreciated. Let be assured of that, all of you. Let me thank you again for that. We will now start our Q&A session. We will proceed. I will take three questions at a time. I'd like to thank you in advance, first of all, to introduce yourself when you ask a question, and to be as concise as possible so we can take as many questions as possible. We'll dedicate 45 minutes to this session.
That will give us plenty of time, I believe, to answer all your questions. Lucie, you have the floor.
Dear shareholders, to kick off this Q&A session, the Individual Shareholders Advisory Committee, CCAI, has been working on the key issues that concern you. I would therefore like to invite the members of the CCAI to stand up so that you can see them in the room.
I encourage you now, I'd like to invite you to ask the three questions that emerged from your work. You have microphone number two at your disposal.
Hello, Philippe Millet. First question, given the situation which as it is in the Middle East, could you tell us what impact on safety of passengers and the operations of airlines of the group, and also tell us more about the financial impact for the Air France-KLM Group? Thank you.
Hello, Nouredine Zeraig, CCAI. I'm talking about decarbonization of the group policy. Can you reaffirm the commitments of the Air France-KLM Group in this aspect, and tell us how Air France-KLM is situated with regard to your competitors? Thank you very much.
Romain Londinsky. My question pertains to the sectorial industry consolidation with the possible arrival of new airlines within Air France-KLM Group. How do you see the link with the governance of France, Netherlands, our shareholders, and what can be the perspective with regard to sovereignty for France and the Netherlands? Thank you.
Thank you very much. I will give the floor first to Ben so that he can answer the first question.
Pertaining to the topic of safety in the Middle East, we have already suspended a number of lines, Tel Aviv, Beirut, Dubai, Riyadh, Medina, and Jeddah. That was done immediately when this situation arose. There are some regions in Africa which had already been suspended even before this conflict. We are quite confident that we have done everything in our power. For the moment, all these lines remain closed. Other companies have picked up further lines, but for us, for the moment, not.
Steven, a few words on the financial impact.
It is a very complicated question. Of course, we have a significant impact from the fuel bill. I indicated that the fuel bill would go up with EUR 2.4 billion at the moment when we released our first quarter results. It's true that the fuel price has come down since then, but you can still think about the order of magnitude of that fuel bill. In the second quarter, the total increase of the fuel bill was just more than EUR 1 billion. We will recuperate of that at least 60% through our revenues, and we are well on track for that. It all depends on where the fuel bill will go, how fast this war will end.
At this moment, we expect, especially in the second quarter, a significant impact because the fuel bill was quite high and we cannot fully recuperate it through our revenues.
Thank you. I am going to hand the floor again to Ben for decarbonization, and on my end can complement as much as I do.
We are retaining our commitment to the 80% of our fleet on next generation between now and 2030. To attain that figure requires an investment of some EUR 2 billion per annum for the new generation fleet. This ambition we retain, our ambition is to be at 10% SAF between now and 2030. Every new aircraft that we introduce into the fleet generates approximately savings of 50% of less noise and the CO2 emissions, it saves up to 25%. With regard to the topics of other airlines that do, maybe one of you can complete Air France and KLM, what they are doing and what are the main issues.
Yes, of course, concerning SAF, we were the first to use SAF in 2022 and 2023. We are still the first users. We have offers for our clients, individual and corporate customers, to have a number of voluntary SAF. The objective is to reach 10% of SAF by 2030, which is above what the European mandate says. We encourage the creation of a SAF pillar with the European Commission to manage to finance the creation of enough of SAF volume to enable to have this line of business to emerge. It's not mature yet, but we want to encourage it and launch it. There's a lot of operational work. The pilots that are present in the room know it. There are lots of procedures when landing, for taxiing, for taking off to save as much fuel as we can.
The whole of the company, all of the projects are weighed financially, but also regarding their impact on carbon, the carbon footprint. Our commitment is still very strong and ambitious and complete as for the previous years.
Yeah, maybe to add, we are actively engaging as well via SkyNRG in the development of eSAF and how to make eSAF a reality in the future, which is still very difficult because of all the availability and the facilities that needs to start. Last week, we celebrated the start together with SkyNRG. SkyNRG is the owner of the first SAF facility in the Netherlands, which is producing more than 100,000 tons a year. As KLM, we have agreement with them for 75,000 tons a year, which is a real commitment of EUR 3 billion.
On the question around consolidation and how that might impact our existing setup, it'll enhance what we already enjoy today. Our footprint in both France and the Netherlands will remain. The two hub structures that we have at Schiphol and at CDG will only be enhanced. This is part of the business case that we put forward to the board to approve the increase of our stake, 19% to 60% in SAS. The objective is to drive traffic away from our competitors, not only over Copenhagen but also over our hubs. We do see this being accretive and not cannibalizing the existing traffic that we have over Amsterdam and Schiphol. We would expect if anything were to happen in Portugal, it would be the same thing.
No. No. Because we have mentioned the term sovereignty, I would like to insist on the importance for our European continent to have direct connections with the rest of the world. Okay. Now we have answered the first three questions. I'm going to hand over to the other three questions. You can raise your hands. I can see a question over here. Near number four, another one near number three, and another one near number one, and we'll come back to you as soon as we can. Don't worry.
Mr. CEO, Mr. Chair, ladies and gentlemen, directors, I'm expressing myself today as the pilot of Air France and a former syndicalist trade unionist. I've been part of two very different parts of the history of our company. I knew a period where some strategic decisions, notably historical, of the company such as freight, were carried out in an ambience which was very tense. The distance between the pilots, employees, brought about a deeper confidence crisis with the consequences that we're all too aware of for our group. I also participated in a more recent period where the reconstruction of a dialogue based upon mutual respect, trust, and transparency enabled the company to sail through the COVID crisis in a rather serene manner, while engaging in a transformation never seen before for our group.
This experience convinced me that in an airline, the reciprocal confidence between the management and the operating personnel is a strategic asset. Mr. Gordon Bethune, who built up Continental Airlines in the 1970s, said that an airline company is not steered with the financial dashboards, but also with the addition of those who make it work on a daily basis. My question is the following: how does the board look to preserve and sustainably this balance between strategic ambition and the following by the employees to the major transformation of the group? Can you confirm, Mrs. Chair, your alignment with the social strategy which has been carried out now for eight years, notably with the objectives of growth which are shared with the pilots? I thank you.
Thank you. We now give the floor to the next person. One and three.
Good afternoon, Chair, dear CEO. I'm an individual shareholder. My name is Christian Cachet. This is the first time I've the opportunity to attend to an Air France-KLM General Assembly, although I have been an individual shareholder since the opening of the capital. That's a good 20 years here. I was brave enough to come all the way, although I no longer live in the southwest of the capital. Before submitting my questions, I have to say, I've been pretty disappointed with the reception. Receiving clients of Air France-KLM is legendary, and I would have loved for this hospitality to benefit shareholders. I ended up at the railway stations without knowing where to head to. When the escalator, you have to head right, I didn't get on the right escalator.
It would be nice for you to do a bit of signage from the Roissybus to this venue. With regards to what you said about the company and on the competition with the Middle Eastern hubs, I don't think this is in our advantage to extrapolate insofar as the climate of insecurity in this geographic area will probably impact and maybe bring to a stop in a medium term, the growth of this hub located in the Middle East. What is your take on this? Thank you very much.
Yes. Third question, please. Give us on the left.
Good afternoon, ladies and gentlemen. Many thanks for this presentation of these results. My name is Jean Rahar Hark. I am an individual shareholder. I kind of hesitated in putting this question to you. We are shareholders and clients of Air France-KLM. Let me share my personal experience. I don't want to draw a general rule from a particular case. Yesterday I prepared a personal trip for a small group to Qatar at the end of October. To fly to Qatar at the end of October, well, I am hoping that by then, the region, traffic will be resumed, and the peace will also have resumed in this region. I was not able to find any direct Paris to Doha flight, although the Qatari competitor lined four flights a day, and one of those flights was with an A380.
I'm quite surprised that Air France is absent of such an important route.
Thank you very much. I will take the first question. You are absolutely right. In order to clarify the future, we need to know where we are at and where we come from. You mentioned the beautiful activity, which is in our group called Air France-KLM-Martinair Cargo. You refer to an ancient past. I would like to tell you that there's not one day that goes by since I am chairing this board of directors, where I don't feel satisfied to know that cargo is only contributing in a positive way to our business. It's a huge pleasure and pride for me. If we're there, it's because a lot of work has been done. You also mentioned, rightfully so, that in a company, and in an airline company, particularly, the question of trust between the top management and the team members is essential.
I'd like to thank the team that heads this group for the last eight years, to have found a way to have a social dialogue that I would qualify as peaceful, because I believe that it is a necessary condition to pursue the development of the group. You can count on myself and on the board to continue to support this movement and this momentum. Now I'd like to talk about the impact of the Middle East crisis. Maybe, Ben, you could start.
On the impact of the current events on the activity by the Gulf carriers, of course, the activity has not returned to what it was prior to this conflict, which started some time ago. We are seeing, as I mentioned in the presentation I made earlier, that we are benefiting with the reduction in capacity with higher loads and the ability to carry more traffic. On the midterm, we believe we should continue to benefit from some of that traffic. Based on history, I've been in this business 36 years, people have short memories, and many passengers choose the airline and the routing in which they fly based on the price. With the amount of capacity that these carriers have, it would be my assumption that they will lower prices to ensure their airplanes are full.
I think mid to long-term, it's not going to have any impact in the way we need to operate in that region. On the third question, surrounding Qatar Airways and Air France-KLM having a flight to Doha, this is a perfect example of how an unlevel playing field can result in a situation where there is no service by either one of our long-haul carriers. The size of the market between Qatar and France is about 100,000 passengers per year, and the number of seats that Qatar Airways has in the market is well over a million seats. The bulk of the customers, 90% of the customers, are flying beyond Qatar to the benefit of their network, which then makes it even more difficult for us to start non-stop services.
It's extremely frustrating for us, and some of the examples of the advantages that they do have are the minimum SAF mandate is only applicable on flights that leave Europe. We're subject to that requirement for the entire journey to a beyond destination, whether or not. We've got some issues within Europe. We have an ETS charge that we have to deal with and pass off to customers. They have much lower charges at their airports, a lot of advantages with taxes on their employees. It is not a level playing field. Some of it we don't expect, those taxes and charges that the European level could neutralize, we expect that to happen, or we are really pushing and lobbying that to happen. It's a perfect example to show how a non-level playing field can impact the amount of capacity that comes into our market.
It's very unfortunate. It's unfortunate for you as a shareholder because it would be nice to have you fly on one of the carriers where you hold shares, and you can't buy a Qatar Airways share because it's 100% owned by the Qatar state.
[Non-English content]. We will now take a new batch of three questions. I think there was a hand raised on that side. I'm looking over the room to see if there anybody else who wants to take the floor and ask a question. We're going to start here.
Thank you. My name is Hans Tettero. I represent SPAAK. You elaborated on this already a little bit regarding SAS. I have some follow-up questions. What governance changes are expected with acquiring a controlling stake in SAS, and how will it be guaranteed that this will not affect the positions of Air France-KLM, as leading four airlines with their own financial management and investment agendas? Does the board agree that the personnel policy within SAS should be at the same or comparable level as within Air France-KLM, and how will this be accomplished?
Merci. Thank you. Now let's go back to sector three, if I see clearly.
Francis Escaret. I'm an individual shareholder. I'll tell you a nice story of an airline company, a company which loves its customers, love those who make it, notably its shareholders. It told a story that it would be giving out dividends, paying out dividends, that dividend was never paid. Instead of that, it was suggested that they have a capital increase. Now that the company is becoming profitable again, would it not be time to start considering a payment, maybe a low one, of said dividends to the shareholders? With regard to the tablet, I'd say that it would be nice to find on it the universal registration document, written questions, and the presentation itself. Thank you very much.
Thank you. I'm just trying to find out if there is a third question, another hand that would be raised. Apparently, it's not the case. Right. Let's talk about SAS. Maybe I hand it over to you.
On SAS. I'm just looking for the person who asked the question. There you are. On SAS, the objective is to create a new hub in Copenhagen. Today they have two, what we call centers of focus, one in Stockholm and one in Copenhagen, and a smaller base in Oslo. One of the reasons, in our view, that they've not been able to fully exploit their geographical region is because they're too far spread amongst the different cities which they serve. We've been public about this, even though we are still technically competitors, and we cannot get into any of their strategic details. From looking from the outside, what we'd like to see eventually is a concentration in Copenhagen, and creation of a new hub.
How that could impact KLM or Air France from a governance perspective, the setup that we have today works quite well, where we have experts from both in the Netherlands and in France, and we have great joint ventures in the United States and elsewhere in the world. We don't anticipate any change there. We would expect some excellent talent that's already within SAS, and we hope to keep those people once this takeover actually goes through. How we set up the organization of which functions and where are they going to be done in Copenhagen and Because the headquarters are actually in Stockholm today. Will they be done in Amsterdam or will they be done in Paris? To be figured out. The objective would be to, as we do today, to ensure that the best talent is doing the best job.
In terms of the way we're set up today, which sometimes can be a little challenging, we are going through some evolution today, but it's always done following all the local regulatory rules that we have in place, plus the internal regulations that we've agreed to. We don't foresee any change.
Merci. Thank you. I think there were a few questions. Maybe you want to add something, right?
Let's first, I'm also personally shareholding this company, so I can imagine your grievance, and I think it should be normal that at a certain moment, we will pay dividends to our shareholders. However, we are currently still having a lot to be paid back related to the COVID debt. I just explained to you there's EUR 500 million a year, which we have paid back since 2022. It's good that we see the end coming. After 2026, at least we don't have to pay back the social charges to Air France. The wage tax will actually end for KLM in October 2027. We are getting out of that tunnel.
The second element, which is also there, is that if you look at our equity, we have now currently an equity of EUR 2 billion, but that equity is supported by EUR 3.2 billion in hybrids. We are continuously optimizing our balance sheet. We want to strengthen our equity by our net result, and when our equity is strong enough, we will pay dividends out of our equity to our shareholders. It is still too soon, and I'm sorry for that. The good news is that at least our share price, if you compare that to a year ago, has been growing with 16%. We are creating value for our shareholders, but unfortunately, we still need to get back to reduce our exposure of this COVID debt, and also to strengthen our equity in the coming period.
Thank you, Steven. I would also like to answer our shareholder. Says he's disappointed not being able to find the text on the tablet. This tablet is meant to vote. It doesn't mean that the rest of the information is not available because the overall, the information was put online on our Air France-KLM website. I just want to make sure that there are no other questions. Yes, there is. Next to zone four. Three. Let's start with four. If you want to ask a new question, we'll have a moment left.
Ladies and gentlemen, James River, I'm an individual shareholder. I have a very specific question with regard to the renewal of the fleet, of the mid-range fleet, because the delivery of the Airbus A320 is coming to an end, and nothing has been announced with regard to the renewal of the aging aircraft A 320 of Air France. Do you have plans? That's what I would like to know.
Thank you very much. Now I'm moving on to this side of the room.
Good afternoon, ladies and gentlemen. Good afternoon, Madam Chair. I live in Paris. I'm Mrs. Sofati and I've had some issues in my shares for some time. I acquired 22, and after 25 years, I only have two left. How is this possible when I didn't sell any? Bizarre. It is bizarre. I'm wondering, who should I contact? Should I ask Air France-KLM for some explanation, or should I contact my bank? When I got here, I was told that I needed to contact my bank, but I would really look forward to some clarification. I know that your activity is not to rob people in the second meaning of the word, because your first meaning, actually, to fly is "vol" in French.
I don't know who to talk to, so please could you clarify this and give me my 20 shares back? Thank you very much.
Thank you. Thank you very much. Is there a third question before I give the floor back to Ben? Yes. Next to zone two.
Good afternoon. Gabriel Bardem. I'm an individual shareholder. My question is more to do with Northern Asia. It is a geopolitical question. China in particular, as we cannot fly over Russia as a result of the conflict. I was wondering whether you plan to strengthen alliances with Chinese airlines, something like a joint venture. As a kind of a Delta and Virgin joint venture, to address this problem more efficiently and to avoid losing market shares. China Eastern is really in SkyTeam and still with SkyTeam. I wanted to know that there is no airlines there in SkyTeam. I think the brand is not really enhanced, pushed forward, commercially speaking. That's about it. That's my question.
Thank you. Ben, maybe. Do you want to tell us about the fleet?
In terms of the question as to those aircraft that will replace the medium-haul Air France aircraft, decision has already been made. This will be A220 Air France between now and 2030, all these A320 will be replaced with the A220.
Thank you. On the question of the shares that disappeared, if I could use this word. First of all, madam, I can absolutely understand your reaction. I wouldn't be happy if I were in your shoes, we need to find the explanation to this disappearance of shares. I will ask, as soon as this session is over, to our team of investigators to come up to you, and I want to make sure that your intention is only to transport passengers at a high altitude, but definitely not to steal them. I hope we'll get to the bottom of this before you leave Charles de Gaulle. Thank you anyway for asking this question, and you were very right to do so.
A question now on geopolitics, on China. How do we work with the Chinese carriers? Ben, you may want to answer that one.
Our commitment to SkyTeam has not changed. We actually now have SAS, who has switched from Star Alliance to SkyTeam, and if we are successful with acquiring TAP, we expect to do the same thing. SkyTeam is getting stronger, and the main objective of SkyTeam is to provide benefits to the individual members. If you are based in Paris and you are a Flying Blue member, if you end up going to a destination that is not served by Air France or KLM, that you can maintain your benefits if you are a top-tier customer. All of those lounge access, et cetera, that will remain in place, and there's always enhancements that are being worked on, in particular on the digital front. On the joint ventures, we have partnerships even with non-SkyTeam partners, such as Qantas as an example.
With China Eastern, it is a challenge to deepen the partnership which we already have, when one of the airlines has the ability to fly over China and the other doesn't. Customers, of course, do have the choice, not just with China Eastern, but also with China and China Southern, to fly on one of those carriers. Because one of them is a SkyTeam member, China Eastern, we do, in some situations, manage to indirectly keep those customers within the partnership. We're fortunate that the bulk of our customers choose to stay on KLM and Air France. Many of them are not comfortable flying over Russia. What we've done is we've scheduled all of our flights to China on a night-night schedule. You leave Europe late at night, this way you don't lose the day.
With the extra time it takes to get to the destination by avoiding Russia, it's not as penalizing as if the flights were going through the day. There's absolutely no reduction in our commitment to SkyTeam, and we continue to invest to get the alliance benefits for our customers to a higher level.
Thank you. I'm turning to the room now to see if anybody else wants to ask a question. We still have a bit of time left if somebody wants to ask a question, I think on sectors three and four, maybe. Second question, please. Is that correct?
Yes. Hello again. Thank you very much for your answers to my first questions. On a medium-term basis, with regards to the conflict in Iran and on its impact on the availability of hydrocarbon of fuel. I've heard that some of the production areas, notably for kerosene, have been impacted. How are you going to adapt your flight operating if the conflict goes on, especially how are you going to manage the long hauls?
Thank you. On this side, please.
Good afternoon, members of the board. This question is about punctuality of Air France. I want to know whether there's a benchmark where we can compare your punctuality compared to other airlines, as far as canceled flights, delayed flights, passengers reaching destination but without the baggage, et cetera. How do you place yourself, for example, compared to British Airways or companies like Qatar or Emirates? Thank you.
Thank you very much. Is there a third hand that will raise on this side? Yes, please.
Hello, ladies and gentlemen. Just one question, that I would be joining a Board General Assembly where French would be spoken, or at least we could have a subtitling, or would there be headsets available as you walk into this? Is there a shortage of headsets?
Thank you. We'll start with the question on the impact of the conflict in Iran and availability of oil. Do you want to start, Ben?
We've publicly gone out with some statements and press releases recently, confirming that we're confident we have enough fuel through the end of the summer and that the entire schedule of Air France and KLM will operate. Beyond that, we don't have full visibility yet, but as we get more confident with fuel supplies, we'll announce that further out. For the next three months, we don't see any issue.
Thank you. I may give the floor to Anne on the punctuality of Air France versus its competitors.
Yes. There is a benchmark that you can consult on Cirium website, C-I-R-I-U-M, which compares the arrival punctuality within 15 minutes. We always compare with our competitors. We all have big challenges since COVID regarding the operational performance because of the supply chain that is still disrupted. Specifically in France, of the air traffic control, and the lack of controllers, that has impacted our punctuality last year. We have worked a lot with civil aviation, to manage this year to have a better performance. We had the beginning of this year, and I think it was a bit the same for KLM. That was tough with the snow crisis.
Since then, we have seen a significant improvement of our punctuality compared to last year, and we have prepared the peak days, between June and September, with a great focus of all the operational teams to reinforce our buffers, to reinforce our resources. We are quite confident with the fuel that is supposed to be there, as Ben has said, we will be able to operate all our flights and with an improved operational performance.
Merci, Anne. Thank you, Anne. On the availability for the headsets for the translation, I would like to apologize. The headsets were available at the reception and in the lobby. If you didn't get one, that's a shame. Sorry about that. I hope that in the meantime you were provided with one. I'm sorry it came a bit late. We'll try to make it more visible next time so people don't miss out on them. There's always room for improvement, isn't there? Please accept our apologies. Thank you very much. I'm turning back to the room because we still have a bit of more time left for more questions. I see someone over there near zone one. Another one near zone four.
Thank you for taking me for my second question. I'm referring to taking the SAS operation. Should that have a favorable issue and come to the fore? My question is the following: Do you have projects with regard to the integration of SAS, of improving the service levels of the company? Which, how would I put it? It's just my personal opinion, but to my mind it is very frugal, if we may call it that, with regard to the quality levels of their lounges and pertaining to the quality of service in the air, notably with the intra-European flights, business included.
Thank you. I'm looking at the right side of the room.
Ladies and gentlemen, Fabian, individual shareholder. I would like to know whether you have any information pertaining to traffic. Looking the other side towards the Americas, because some people refuse, or how would I put it? No longer wish to go to the United States of America because of the disliked president they have there. Have you felt any decrease in traffic both ways, either way across Atlantic? With regard to the lady who lost her shares, well, you need to know that in August of 2023, it was divided by 10, the shares. It was divided by 10 at the time. They had 20, which became two. The 0.2 must have been paid by her bank. She needs to check that out.
Thank you for doing the job of the investors team. Thank you very much. First question regarding the quality of SAS.
As I already mentioned, we don't today have control of SAS. What I can share is they are the most on-time airline in Europe. They're running a very good operation. They have made considerable investment already in their product. They have introduced a European business class, which was not the case in the past. That's already up and running. They are in the process of opening a new business class lounge in Copenhagen. From what we understand, they have numerous projects for improving the onboard product for long-haul flights. We're already seeing an considerable investment at SAS. Part of the business case for us is that the three hubs, well, the two and then hopefully new hub in Copenhagen, is that the customers who choose to fly with our group have a similar standard of service across the three hubs.
That would be the midterm objective.
Thank you very much, and maybe we can talk about.
Still very strong. There's still a very strong appetite for traffic originating in the U.S. to Europe, actually a little higher than last year. I think that's compensating for the very slight decrease in demand out of Europe to the U.S. Overall, the market is quite balanced, and we're quite happy with what we're seeing.
Thank you very much. I think we're reaching the end of the 45-minute Q&A session. I just want to make sure there are no further questions. Yes, I see one hand. Two hands. Maybe that will be the last two questions, if you agree.
Gregoire Lamoury, a former employee and a shareholder of the company. My question pertains to a term which is used during the initial presentations, which is that of artificial intelligence. I wish to know what are your anticipations, forecast intentions, with regard to the usage of AI, artificial intelligence?
Thank you. I saw a hand back in the middle row. Please go ahead.
Dominique, I'm an individual shareholder. The Orly Airport is very soon going to be closing down a major runway for refurbishment. That could impact very much the traffic on Orly. What have you scheduled with regard to cancellations, Transavia flights as a whole, with regard to the closure which has been scheduled? Are there cancellations that have been put in place? What's going to happen, and what will be implemented for the passengers who usually fly out of Orly or into Orly? Is there going to be transport in place, shuttles? What is scheduled, is what I'm saying, at Transavia level? Thank you.
Thank you very much. Did I miss something? No? On AI, which is, of course, a sensitive topic for all companies, including ours. Ben, do you want to say a word on that? Then Marjan and I will try to complement it.
Sure. Artificial intelligence, like all other industries and all other airlines, we're watching it very closely. We are working on quite a few initiatives. Our industry, aviation, did pioneer a lot of artificial intelligence decades ago. There are parts of our business which were pioneers with artificial intelligence. Obviously, we are not an independent high-tech company, we depend on a lot of third parties to introduce artificial intelligent ways for us to improve and find new ways of performing our business. Perhaps what I could do is ask Anne and Marjan to share with you some of the projects that are currently underway at each of our major airlines.
Yeah. Well, maybe to start, Ben, what you mentioned, as KLM, we started using social already during the ash clouds. It was already a long time ago, but that was the pioneering part. We developed an AI strategy. We are part of Kickstart AI. It's a cooperation between a lot of companies in the Netherlands, and we have some real use cases. We reduce the waste on board, and therefore also the weight on board, by using AI, and we look into if we at least could reduce the fuel consumption as well with AI. We are very active in looking in ways to make processes and cost reduction more efficient and effective.
Equally, at Air France, there are many initiatives aiming at facilitating the work of the different business lines, particularly on the procedures to try to go quicker on the regulations. Procedures are answering to clients. This is very important for our competitiveness. We are looking today on how we can automate. We've done it for many years, a certain number of tasks that don't have any added value, to focus our jobs on the tasks that have a higher added value, particularly services, where we could have sometimes some tension. I'm thinking about the mechanics on the planes, the stock management, consultation of documents. It could be made much easier to check on our stock, on maintenance tasks as well, that have increased since COVID. That's just a few examples.
There are many more, but we can see most companies that are moving into these initiatives of agents are empowered to complete a number of processes, so they can gain time on tasks that have higher added value.
Thank you very much. Since you have the floor, maybe first Ben, and then on Orly, and then maybe Anne.
With regards to Orly artificially constrained from a slot perspective for over two decades. With three runways, even when there's terminal work or runway work, it very rarely impacts the ability of Orly to operate the schedules that are planned by the various airlines. There have been works going on at Orly almost every summer for the last few years. It does not result in any transfer of activity to Roissy. The bulk of our activity will be operated, so we don't see any material impact on our operation at Orly for this summer based on works that we're aware of by Aéroports de Paris.
Yes, absolutely. There's been works on the runway in Orly. It was scheduled during the summer because of the weather condition, and it was very well anticipated by Transavia, who work closely with Aéroports de Paris. We take this impact into account for customers, so we shouldn't expect any problems because all of this was anticipated.
Thank you very much. Thank you for all your questions, and I suggest that we give the floor again to Lucie Muniesa that we can proceed to the vote on the resolutions.
Thank you, Florence. The final quorum is 63.26%. The legal quorum, which is one quarter of the shares with voting rights, has therefore been reached. This quorum includes all shareholders who are present, represented, or have cast their votes by mail. Before we proceed to the vote, I suggest we watch a video on how to use the tablets that have been provided to you.
Let us now proceed to the vote on the resolutions. First, the ordinary resolutions. First resolution, approval of the financial statements for the fiscal year ended December 31st, 2025, showing a profit of EUR 129,005,011. Voting is now open. You have 12 seconds to vote. Voting is now closed. The resolution is adopted. Second resolution, approval of the consolidated financial statements and transactions for the fiscal year ended December 31st, 2025, showing a group net income of EUR 1.59 billion. Voting is now open. Voting is now closed. The resolution is adopted. Third resolution, appropriation of net income for the fiscal year ended December 31st, 2025. It is proposed to allocate the net income for the fiscal year in its entirety to retained earnings.
Voting is now open. Voting is now closed. The resolution is adopted. Fourth resolution, approval of a regulated agreement relating to the conclusion of an amendment to the commercial cooperation agreement between Air France-KLM, Delta Air Lines, and Virgin Atlantic Airways. Voting is now open. Voting is now closed. The resolution is adopted. Fifth resolution, renewal of the term of office of Mrs. Florence Parly as a member of the board of directors for a term of four years. Voting is now open. Voting is now closed. The resolution is adopted. Sixth resolution: renewal of the term of office of Mr. Michel Delli-Zotti as a director representing employees and former employee shareholders for a term of four years. Voting is now open. Voting is now closed. The resolution has been approved.
Seventh Resolution: renewal of the term of office of Mr. Nicolas Foretz as the director representing employees and former employees who are shareholders for a term of four years. Voting is now open. Voting is now closed. The resolution has been approved. Eighth Resolution: acknowledgment of the expiration of the term of office of KPMG as the independent auditor responsible for auditing the financial statements and appointment of Deloitte & Associés as the independent auditor responsible for auditing the financial statements. Voting is now open. Voting is now closed. The resolution has been approved. Ninth Resolution: acknowledgment of the expiration of the term of office of KPMG as the independent auditor responsible for certifying sustainability-related information and appointment of Deloitte & Associés as the independent auditor responsible for certifying sustainability-related information. Voting is now open. Voting is now closed. The resolution has been approved.
10th resolution: approval of the information regarding the 2025 compensation of each of the corporate officers. Voting is now open. Voting is now closed. The resolution has been approved. 11th resolution: approval of the compensation paid or awarded to Mrs. Anne-Marie Couderc for the 2025 fiscal year in her capacity as chair of the board of directors from January 1st to June 4th, 2025. Voting is now open. Voting is now closed. The resolution has been approved. 12th resolution: approval of the compensation paid or awarded to Mrs. Florence Parly for the 2025 fiscal year in her capacity as chair of the board of directors effective June 4th, 2025. Voting is now open. Voting is now closed. The resolution has been approved. 13th resolution: approval of the compensation paid or awarded for the 2025 fiscal year to Mr. Benjamin Smith in his capacity as Chief Executive Officer.
Voting is now open. Voting is now closed. The resolution has been approved. Fourteenth resolution: approval of the compensation policy for non-executive corporate officers for the 2026 fiscal year. Voting is now open. Voting is now closed. The resolution has been approved. Fifteenth resolution: approval of the compensation policy for the Chair of the Board of Directors for the 2026 fiscal year. Voting is now open. Voting is now closed. The resolution has been approved. 16th resolution: approval of the compensation policy for the Chief Executive Officer for fiscal year 2026. Voting is now open. Voting is now closed. The resolution has been approved. 17th resolution: authorization granted to the Board of Directors to trade in the company's shares. Voting is now open. Voting is now closed. The resolution has been approved. Let's now turn to the special resolutions.
18th resolution: delegation of authority to the Board of Directors to carry out capital increases reserved for participants in a company or group saving plan with the waiver of shareholders' preemptive subscription rights. Voting is now open. Voting is now closed. The resolution has been approved. 19th resolution: delegation of authority to the Board of Directors to carry out capital increases for the benefit of beneficiary categories comprising employees of foreign subsidiaries with the waiver of shareholders' preemptive subscription rights. Voting is now open. Voting is now closed. The resolution has been approved. 20th resolution: authorization granted to the Board of Directors to reduce the capital by canceling treasury shares. Voting is now open. Voting is now closed. The resolution has been approved.
21st resolution: ratification of the amendment to the article of association of CARAT 4 of Article 30 relating to general meetings to bring it into compliance with the new regulatory provisions. Voting is open. Voting is closed. The resolution has been approved. 22nd resolution: authorization for formalities. Voting is open. Voting is closed. The resolution has been approved. As all resolutions have been put to vote, I now return the floor to the chair.
Thank you very much. Dear shareholders, our meeting has come to a close now. I would like to thank you for your attendance and for the quality of our discussions. Throughout the day, I have once again been able to appreciate the strength of your commitment to the group and the interest that you show in it. This is another reason to continue holding ourselves to very high standards. I would like to conclude by thanking the women and men who bring it to life every day with the ambition of serving our clients to the best of our ability. I look forward to seeing you again next year to present to you the next chapters of our story. I would like to thank you again for being with us this afternoon. I'll see you soon. Bye.