Europe's largest airline Air France-KLM posted a 44 percent drop in operating profit in the second quarter and cut its full-year profit forecast while boosting a cost-saving plan to prepare for hard economic times.
The Franco-Dutch airline group said on Thursday quarterly operating profit fell to EUR405 million euros (USD$511.3 million), on revenues which fell 3.2 percent to EUR6.695 billion.
"The result is good in a difficult context. We are resisting the crisis better than our competitors," deputy chief executive Piere-Henri Gourgeon said.
Air France-KLM reported a net profit for the July-September quarter down 96 percent at EUR28 million, after a charge based on the future potential value of currency and fuel options, and adjusted net income of EUR411 million, down 5.6 percent.
Finance Director Philippe Calavia said the adjusted net figure was a more accurate representation of profitability but that the group was obliged to show the charge at the bottom line to comply with a global accounting rule, even though it believes it creates volatility.
Air France-KLM, which last month warned it would be unable to meet its full-year operating profit goal of EUR1 billion, removed the numerical target.
It expected its results to be "clearly positive" at the operating profit level in 2008/09 barring a worsening of market conditions.
The airline said it would boost its cost savings for 2008/09 by EUR260 million to EUR690 million to prepare for the impact on air travel on the global financial crisis.
Thursday's half-year results came a day after international airlines lobby IATA reported business and first-class air travel had dropped sharply in September due to the financial crisis.
Gourgeon said there was no news so far on whether Air France-KLM or Lufthansa would be chosen as foreign partner for Alitalia. "We are waiting with serenity," he said.
