Air France-KLM reports a 96.2 percent fall in second quarter earnings
Published: 21 Nov 2008
Air France-KLM Group reported a net profit of euro28 million ($35.4 million) for the July-September period, down 96 percent from euro736 million a year earlier.
The group said its profit plunged in the second quarter as higher oil prices and financial charges weighed on the airlines' earnings. Reported net profit for the quarter plunged by 96 percent but the airline said this was due to a charge based on the potential value of currency and fuel options, something its executives described as a technicality.
Fiscal second-quarter operating profit fell 44 percent to 405 million euros ($511.3 million), slightly beating analyst expectations, on sales which fell 3.2 percent to 6.695 billion.
Europe's biggest airline said it will be "clearly in profit" this fiscal year.
As per the information available, as recently as Oct. 24 it had talked in terms of a €1 billion target for operating profit, while warning that reaching that goal would be "very difficult". Second-quarter figures included a €373 million charge against the value of hedging instruments.
The group's financial position is "healthy", its chief financial officer, Philippe Calavia, said Thursday, with €4.4 billion in cash and available credit lines of €2 billion, of which the airline drew down 500 million euros at the beginning of October.
Air France-KLM insisted it was able to withstand a drop in worldwide premium travel and other key traffic because of the broad reach of its network, feeding traffic into twin Paris and Amsterdam hubs joined by a 2004 Franco-Dutch airline merger.
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