The merger of two complementary carriers, Air France and KLM, forming the AIR FRANCE KLM Group, has reduced costs and boosted revenues, in other words generated substantial synergies thanks to:

• the optimization of networks based on two powerful hubs,
• a more effective redeployment of passenger and cargo activities,
• an expanded offering of aircraft maintenance services,
• cost savings in purchasing, sales distribution and IT applications.

These synergies, which are vital to AIR FRANCE KLM’s good operating results, should gain momentum, and further improve the Group’s financial performance.

► A Healthy Financial Situation

With net debt going down and equity going up, the AIR FRANCE KLM debt-equity ratio has improved from 0.94 at 31 March 2005 to 0.56 at 31 March 2006 and subsequently to 0.43 at 31 March 2007, thus representing a virtuous circle for the Group.