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Air France-KLM boosts SAF commitment with DG Fuels investment

Published Nov 15, 2023 06:02
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NEW YORK - Air France-KLM has taken a significant step to cement its position as a leading consumer of sustainable aviation fuel (SAF) by directing a $4.7 million investment into DG Fuels' Louisiana plant, aimed at bolstering the project's financial groundwork. The strategic move, announced on Friday, comes as the airline group strives to meet stringent environmental targets and reduce its carbon footprint.

The partnership between Air France-KLM and DG Fuels extends beyond the financial injection. It includes a supply agreement that grants Air France-KLM access to up to 75,000 metric tons of SAF annually. This deal enhances an already established contract with DG Fuels that promises the airline group 600,000 metric tons of SAF from 2027 through 2036.

Air France-KLM's commitment to integrating SAF into its operations aligns with France's 2022 mandate, which requires airlines to blend traditional jet fuel with a certain percentage of SAF. This legislation has propelled Air France-KLM to the forefront of SAF consumption globally, accounting for 17% of total production.

DG Fuels is not resting on its laurels, as it also disclosed plans to expand its SAF production capabilities with an additional facility in Maine. The company remains confident in its competitive edge over conventional jet fuel prices due to its efficient production processes.

The aviation industry is under increasing pressure to reduce greenhouse gas emissions, and Air France-KLM's latest investment highlights its proactive approach to tackling this challenge through innovation and strategic partnerships. The increased use of SAF is a crucial component in the industry's broader efforts to achieve carbon-neutral growth and align with international climate goals.

InvestingPro Insights

As Air France-KLM (AIRF) takes a significant step towards sustainable aviation fuel (SAF), InvestingPro provides some key insights into the company's financial status and future prospects.

InvestingPro data reveals robust financials for AIRF in the last twelve months as of Q3 2023. The company reported a revenue of 31,442.01M USD, with a growth rate of 23.4% and a gross profit of 6,855.9M USD. The company's EBITDA growth stands at 24.27%, indicating strong operational efficiency.

The InvestingPro Tips also provide a valuable perspective. Despite the recent slowdown in revenue growth, AIRF's strong earnings have led to an impressive free cash flow yield. The company's low earnings multiple and the prediction of profitability this year are positive indicators for potential investors.

There are over 11 additional tips available on InvestingPro, offering comprehensive insights into AIRF's performance and prospects. These data points and tips highlight the company's financial strength and strategic positioning in the Passenger Airlines industry, which could be critical for investors considering AIRF's commitment to sustainable aviation fuel and the environmental mandates it must meet.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Air France-KLM boosts SAF commitment with DG Fuels investment

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