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Air France to Postpone Plane Deliveries

Published on Dec 19 2014 7:48 AM in General Industry

Air France to Postpone Plane Deliveries

Air France will push back aircraft deliveries to contain costs after announcing a third profit revision this year that sent its stock tumbling 8.3 per cent. Europe’s biggest airline will not take...

Air France will push back aircraft deliveries to contain costs after announcing a third profit revision this year that sent its stock tumbling 8.3 per cent.

Europe’s biggest airline will not take some Boeing 777 wide-body jets due in the next two years after saying 2014's earnings before interest, tax, depreciation, and amortization will be €200 million ($246 million) lower than expected. Poor sales on long-haul routes and a two-week pilot walkout in September are largely to blame for the shortfall, it said.

The revision in the final days of 2014 caps a tough 12 months for Air France-KLM, which had set out to reap the rewards of a five-year recovery plan. Instead, the longest strike in the Paris-based company’s history crippled traffic for weeks and leaves it on the defensive as the wider industry reaps the benefits of the oil-price drop’s impact on fuel bills.

"We’ll have to look again at cutting our investments, and clearly that may involve our fleet," CEO Pierre-Francois Riolacci said on a conference call late yesterday after announcing the earnings revision, with this year’s Ebitda now seen at €1.6 billion at best.

Air France shares fell as much as 68 cents and were trading down 55 cents or 6.7 per cent at €7.75 as of 9:33 a.m. in Paris. The stock has gained 2.4 per cent this year, valuing the company at €2.33 billion.

Bloomberg News, edited by ESM

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