What will be the impact of ESG targets on AF-KLM's credit metrics?

Measuring how ESG targets are translated into financial forecasts, and then into an investment recommendation, can be tough sometimes. However, in some industries - such as the Travel & Leisure sector - such a process can be more tangible. This has been seen with the SLB issue by Air France back in January. The targets set in its sustainability framework are in line with the overall airline industry’s goal of reaching net-zero emissions by 2050.

In addition to presenting our detailed credit view and investment recommendation on Air France’s EUR bonds, we also comment on how reaching those sustainability targets will impact the company’s key credit metrics, most notably EBITDA, cash generation, and net leverage. Further information on whether the airline’s ESG approach makes sense and if the imposed targets are reachable can also be found in our credit study.