Air France-KLM issues warning

Air France-KLM became the first major European airline to issue a profit warning since the financial storm broke in the summer, sending its shares down 10 per cent as the industry reported its worst demand in five years. Europe's largest airline group,...

Air France-KLM became the first major European airline to issue a profit warning since the financial storm broke in the summer, sending its shares down 10 per cent as the industry reported its worst demand in five years.

Europe's largest airline group, and the world's largest by revenues, said it would be "very difficult" to reach a target of €1 billion operating profit this financial year.

However the airline, which has so far weathered the crisis better than many rivals, said it would remain "comfortably" in the black as long as market conditions did not get worse.

The economic malaise showed few signs of easing as European stocks ignored an attempted recovery on Wall Street and fell by an average five per cent on a slew of warnings and bad results.

Air France-KLM shares fell 9.8 per cent to €10.7 in the first few minutes of trading and were briefly suspended.

To shore up profitability, Air France-KLM said it would boost its existing Challenge 10 cost-saving plans by another €100 million on top of €190 million earlier this year.

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