Airline drops profit target
Air France KLM reported a fall of 44.1% in its operating profits for the second quarter to September 30 from €725m in 2007 to €405m this year.
The world's largest airline in terms of revenue also said it was not forecasting what its profits would be for the full year.
It had originally said they would be €1bn but dropped that figure last month.
The latest figures, released today (November 20) showed AF KLM's revenues rose in the second quarter by 3.2% from €6,489m to €6,695m.
Net income in the three months from July to September was down 96% to €28m.
For the first half of its financial year, AF KLM reported an operating profit of €639m, 43.9% down on the 2007 figure of €1,140m while revenue rose by 4.4% from €12,434m in 2007 to €12,983m
Net income for this six month period was down 82.9% to €196m.
Jean-Cyril Spinetta, chairman and ceo of AF KLM, said: "Activity in the first half held up well in a more difficult operating environment, marked by the first signs of economic slowdown and a further sharp rise in oil prices. Traffic was positive and unit revenues resilient.
"We recorded revenue growth of over 4% despite the appreciation of the euro relative to other currencies.
"The rise in oil prices was partly offset by our hedging measures, but nevertheless added almost €700m to our fuel bill which amounted to some €3bn.
"In spite of these headwinds, the group generated operating income of €639m in the first half and €405m in the second quarter, the highest among our European peers both in terms of results and margins."
Mr Spinetta, who is due to stand down as ceo in January, said the deterioration in the economy had accelerated since the summer.
He added: "The generation of an additional €260m in savings this year will help us stabilise our costs and protect our profitability.
"The group is committed to making the most of its competitive advantages, and I am confident we will emerge stronger from the current crisis."