Air France-KLM shares fall after profit warning
Shares in Air France-KLM fell over 5% yesterday after the French-Dutch airline group issued a profit warning.
The company said earnings for the year would drop from a previously forecast €2.5 billion to between €2.2bn and €2.3 billion due to competition on long-haul routes, weak cargo demand and currency restrictions in Venezuela.
However, earnings are still expected to be 20% higher than in 2013.
"While not representing a turning point in market trends, the June traffic figures published today as well as bookings for July and August nevertheless reflect the over-capacity on certain long-haul routes, notably North America and Asia, with the attendant impact on yields," the company said.
"This comes on top of the persistently weak cargo demand and the challenging situation in Venezuela identified in the first quarter."
Currency restrictions in Venezuela are preventing airlines from repatriating revenues from seats sold there.
The profits warning came just weeks after German rival Lufthansa signaled its profits would be lower this year.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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