Air France-KLM posts Q3 net loss of euro505 million
Air France-KLM said on Friday it posted a loss in the three months to December as the economic crisis deepened, hurting business class travel and cargo traffic and depressing fares.india Updated: Feb 13, 2009 15:12 IST
Air France-KLM said on Friday it posted a loss in the three months to December as the economic crisis deepened, hurting business class travel and cargo traffic and depressing fares. To weather the downturn, Europe's largest airline said it is freezing all new hiring, cutting costs and reducing capacity. The company reported a net loss of euro505 million ($648 million) in its fiscal third quarter, compared with a profit of euro139 million a year earlier. It posted an operating loss of euro194 million, confirming a January warning.
"Activity in the third quarter reflected the increasing severity of the economic downturn," the company said in a statement. The company plans to cut its workforce by up to 1,200 in the full year ending March through attrition as people retiring won't be replaced, spokeswoman Veronique Brachet said. The group employs 104,600 employees throughout the world and last financial year cut 2,000 jobs through attrition.
The airline said the "economic environment continues to deteriorate" and it intends to cut capacity by 2 per cent in the summer and reduce spending.
Air France-KLM said it still aims for a profit in the full year that ends in March, but the level will depend on the economic environment.
Shares rose 4.5 per cent to euro8.08 ($10.37) in Paris morning trading on Friday.
Airlines worldwide have been suffering amid the crisis. The International Air Transport Association said the global airline industry lost $5 billion last year as passenger growth slowed and cargo traffic declined.
IATA chief executive Giovanni Bisignani sees 2009 as "one of the toughest years ever for international aviation." Air France-KLM's revenue fell 0.1 per cent in the third quarter to euro5.97 billion.
Passenger business held up as long-haul traffic proved "resilient," the company said. But a decline in premium class revenue was not compensated by a "robust performance" in economy class.
Cargo traffic has been hit particularly hard by the crisis, falling 12.5 per cent in the quarter.
The decline in petrol prices in the three months ending December hurt results from Air France-KLM's hedging policies, designed to insure against rising prices. The company said it is unwinding some of these positions.
The group's finances are "healthy" with cash of euro4.3 billion at the end of the year and available credit lines of euro1.4 billion, the company said.