If parts suppliers increase prices rapidly, Air France-KLM will respond “aggressively”, group CFO Steven Zatt said during an investor call following the company’s latest financial results.
Commenting on the worldwide tariffs announced by United States President Donald Trump, Zatt noted that it is still too early to tell but opined that the US, as an aviation exporter, would primarily hurt itself if it followed through with the tariffs.
"It all depends for us more on the retaliation from Europe,” he said, adding that Air France-KLM is carefully watching the tariffs issue. “We will aggressively reply to any suppliers which are intending to increase their fees," he stressed.
Zatt also said that aircraft deliveries will not be significantly impacted either way since the bulk of the group’s orders come from Airbus, with only four B787-10s expected to join the KLM Royal Dutch Airlines (KL, Amsterdam Schiphol) fleet this year.
Commenting further on the impact of US tariffs on travel trends, Zatt said that there is a slight increase in business travel and premium economy on US routes, but economy is seeing some softness, in particular on transatlantic flights.
“We are seeing some slight shift in the overall look at our overall capacity, toward Canada, quite a little bit to Latin America,” he said. But he cautioned that it is difficult to make predictions since booking windows have decreased.
“I don’t see a shift in any capacity through the third quarter. And perhaps in the fourth quarter, if necessary, we’ll start to relook at that. But as of today, we’re maintaining our capacity across the network as planned,” the CFO stressed.
