GHG Emissions, Commercial, Finance  -  January 10, 2023

Air France-KLM Issues Sustainability-linked Bond 

Air France-KL placed its first sustainability-linked bonds for a nominal amount of €1.0 billion that are linked to the company’s target to reduce its well-to-wake Scope 1 and 3 jet fuel GHG emissions per revenue ton kilometer (RTK) by 10% by 2025, compared to a 2019 baseline.

 The offering is composed of two tranches:

• a €500 million with a 3.3-year maturity and a coupon of 7.250%; and
• a €500 million with a 5.3-year maturity and a coupon of 8.125%.

The transaction will smoothen Air France-KLM’s debt redemption profile over the next few years and provide additional liquidity to deliver on its sustainable transformation plan, including the renewal of its fleet, according to an announcement.

The proceeds will be used to pursue further partial redemption of the outstanding bank loan guaranteed by the French State. 

This inaugural transaction links the company’s financial strategy with its environmental objectives and represents an additional milestone in Air France-KLM’s ambition to achieve its decarbonization targets, as a leader for a more sustainable aviation industry.

The Air France-KLM Group and its airlines are committed to reducing their environmental footprint as part of a transparent and responsible approach to sustainability, with the objective to diminish its well-to-wake Scope 1 and 3 jet fuel GHG gas protocol emissions by 30% per revenue ton kilometer (RTK) by 2030 compared to 2019. 

The SBTi’s Target Validation Team approved the Group’s Scope 1 and scope 3 emissions reduction targets in December 2022.