Air France-KLM expects a EUR7.5 million euro (USD8.8 million) cost impact after failing to meet 2025 jet fuel greenhouse gas emissions targets tied to EUR1 billion (USD1.1 billion) worth of sustainability-linked bonds, a spokesman for the group has confirmed to ch-aviation.
According to its 2025 consolidated financial statements released on February 19, 2026, the group said it did not achieve its goal of cutting greenhouse gas emissions per revenue tonne-kilometre by 10% by 2025 compared with a 2019 baseline. The target was tied to sustainability-linked bonds issued in January 2023.
The bonds, totalling EUR1 billion, were issued in two EUR500 million (USD589,171) tranches. One tranche matures May 31, 2026, and carries a 7.25% coupon. The second matures May 31, 2028, with an 8.125% coupon and is accounted for as a non-current financial liability as of December 31, 2025.
As a result of missing the emissions target, Air France-KLM said it will pay a EUR750 (USD884) redemption premium per bond when the 2026 tranche matures. For the 2028 tranche, the coupon will increase by 0.375% for payments due May 31, 2027, and May 31, 2028.
Air France-KLM blamed the failure to meet the goal on delays in fleet renewal due to supply chain constraints, engine issues affecting some new-generation aircraft, including several A220-300s, and higher fuel consumption from longer flights on certain routes amid geopolitical disruptions.
