PARIS -- Battered by fuel costs and hedging in deteriorating markets, Franco-Dutch airline Air France-KLM Friday said it swung to a fiscal third-quarter net loss and is planning a spate of cost-saving measures.
But the Paris-based company also said it expects an operating profit in the fiscal year ending March 31.
In the third quarter, it swung to a net loss of 505 million ($649.2 million) from a net profit of 139 million in the same period a year earlier. That was much wider than the estimated net loss of 274 million on average forecast by a consensus survey of 10 analysts provided by the company.
ReutersAmong measures to be taken, Air France-KLM said it will cut summer 2009 capacity by 2%, reduce capital expenditure by 1.2 billion, of which 600 million will be in the coming year, and eliminate 1,000 to 1,200 jobs this year through attrition.
Air France-KLM, Europe's largest airline by revenue, also posted an operating loss of 194 million for the third quarter compared to an operating profit of 311 million a year earlier. The company late last month said it expected to post an operating loss of around 200 million for the third quarter, though it didn't estimate the net result or comment on the fiscal year.
It was Friday cautious about the full-year operating profit it expects, saying, "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."
Meantime, it said it will continue assessing costs to achieve more savings where possible.
Air France-KLM's revenue in the third quarter of 5.97 billion was little changed from 5.98 billion a year earlier. Analysts had expected revenue of 5.98 billion for the quarter.
The company said results were hurt by the cost of fuel hedging. Oil prices fell sharply in the fourth quarter from mid-year highs. As a result, Air France-KLM will unwind several of its fuel-hedging positions, giving a current hedged position of 43% for 2009-2010 and 20% for each of the following two years.
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