Result reflects "severity of economic downturn"
Air France KLM reported a net loss of €505m for the third quarter of its financial year.
The figure for the three months to the end of December compares with a €139m profit for the same period in 2007.
The group said its revenue for the period fell by 0.1% from €5,976m in 2007 to €5,973m last year while its operating loss was €194m, compared with an operating profit of €311m in 2007.
The airline cited a loss of €103m on currency exchange rates and a further loss of €288m in fuel hedging for its third quarter performance.
But it said the main cause was the "increasing severity of the economic downturn."
The airline said that while traffic business "held up" and long haul traffic was "resilient", there was a decline in premium revenues which the rise in economy class did not offset.
Medium haul also suffered a "poor performance" on the French domestic market, both in terms of revenue and traffic.
AF KLM said its operating income for the nine months to the end of December was €445m, a drop of 69.3% compared to the same period in 2007.
But the airline said its financial position remains healthy, with cash of €4.3bn in December 31, 2008 and available credit lines of a further €1.4bn.
It added: "The economic environment continues to deteriorate, and the group is taking several new measures to face up to this situation."
These including a 2% cut in capacity for summer 2009, the "unwinding" of several fuel hedging deals and a €1.2bn cut in capital spending, including €600mthis year.-
"Our target for financial year 2008-09 is still of a positive operating result, but its level will depend on economic developments between now and the end of the year, their impact on the passenger activity, and especially on cargo which is facing extremely difficult conditions, as reflected in recent monthly traffic statistics.
"In the meantime, we will continue to assess all our costs in order to achieve additional savings wherever possible," the airline said.
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