Air France's 'absurd' valuation lures buyers where many fear to go

Toulouse, France

EVEN by the cut-throat standards of the aviation industry, Air France-KLM Group has been a dire case: labour fights that have turned violent, cost-cutting efforts blocked by politicians, low- cost carriers aggressively taking over its home market. Yet, more investors are starting to buy in.

The arrival in July of new CEO Jean-Marc Janaillac, who promises a conciliatory approach towards labour, won the attention of Roche-Brune Asset Management, for example. Air France- KLM made progress on cost-cutting under the previous CEO, and further restructuring can be achieved now, according to the firm, which bought almost 600,000 shares over the summer.