Air France-KLM Quarterly Profit Falls as Pilot Strike
Published on Oct 29 2014 1:03 PM in General Industry
Air France's third-quarter profit slumped following a two-week pilot strike that crippled Europe’s largest carrier, which said it may need to deepen savings as bookings remain weak into the fourth quarter.
Operating profit declined to €247 million from €641 million a the year earlier, the company said today. Pressure on ticket prices will continue in the aftermath of the company’s most extensive walkout as well as broader market weakness, Air France-KLM said.
“It makes sense to be very stringent how we manage things, but there have been no drastic measures,” Chief Financial Officer Pierre-Francois Riolacci told journalists on a call. A tough trading environment and potential late booking “will hit us in the fourth quarter.”
Air France-KLM has reined in costs with a three-year plan called Transform 2015, and is revamping its unprofitable cargo business as it reviews the setup of its European and domestic operations, which are losing passengers to low-cost carriers such as EasyJet Holdings Plc. Air France pilots stopped flying on 15 September in protest of a plan to have low-cost unit Transavia assume most short-haul flying in Europe.
The stock traded 1.7 per cent higher at €6.76 as of 1:32 p.m. in Paris. The shares have dropped 11 per cent this year, valuing the company at €2 billion.