Air France quarterly profit down

19th November 2003, Comments 0 comments

PARIS, Nov 18 (AFP) - French airline Air France, which is preparing an alliance with Dutch carrier KLM, reported a fall in quarterly profits Tuesday and said it was stepping up measures to cust costs in order to meet its full-year 2003 performance target.

PARIS, Nov 18 (AFP) - French airline Air France, which is preparing an alliance with Dutch carrier KLM, reported a fall in quarterly profits Tuesday and said it was stepping up measures to cust costs in order to meet its full-year 2003 performance target.

The company reported a net profit for the July-September period of EUR 48 million
(USD 57 million) compared with EUR 57 million in the same period the previous year and analysts' expectations in a range from EUR 71 million to EUR 76 million.

The results from 2002 had been modified to reflect accounting changes in March this year, the company said.

Operating profit fell to EUR 100 million in the second quarter of the company's business year from EUR 139 million in the same period of 2002 while sales slipped to EUR 3.184 billion from EUR 3.236 billion.

"This half-year was hit by the consequences of the Iraq war and the SARS epidemic in Asia," chiarman Jean-Cyril Spinetta said in a statement.

"In spite of the significant signs of recovery since mid-August, our traffic to Asian destinations only returned to pre-crisis levels in October.

"Furthermore, even though there are now tangible signs of recovery, the sluggish economies in France and elsewhere in Europe continued to weigh on our activity in the second quarter."

As a result the company would increase cost cutting measures in the second half of the business year in order to meet its full-year target of generating a "slightly positive" result at the operating level.

The new measures would make savings of EUR 60 million, Spinetta said without specifiying over how much time.

The company also sketched plans to cut unit costs by six percent over the next three years thanks to its merger with KLM and by restructuring its European passenger operations.

In October Air France and KLM signed an agreement that would create the world's biggest airline in terms of sales.

Under terms of the deal a holding company to be called Air France-KLM will be formed with Air France owning 81 percent of the group and KLM the remaining 19 percent.

© AFP

                                                                       Subject: French news



0 Comments To This Article