22/05: Air France-KLM swings to $855 million loss
Category: Ocean, Rail and Air News
Posted by: froglog
LONDON (MarketWatch) -- Air France-KLM on Thursday said it swung to a 542 million euro ($855 million) loss in the fourth quarter on a potential fine over colluding on cargo prices and warned that the current fiscal year's operating profit may drop 29% on worries over oil prices and the health of the global economy.
Europe's second-largest airline said it lost 542 million euros, or 1.84 euros a share, for the three months ended March 31, after earning 44 million euros in the year-earlier fourth quarter. Its annual profit of 748 million euros was well below the 1.19 billion euros compiled in a survey of analyst estimates by FactSet Research.
Most of the quarterly loss was on a 493 million euro after-tax provision due to a European and U.S. investigation into the air-cargo industry. Though other airlines including British Airways also have taken provisions over the European Union and U.S. probe, Air France's was higher than what was expected.
But even excluding the cargo provision, the airline ran a loss during the period.
Operating costs rose 7% during the latest quarter, Air France-KLM said. While fuel represented much of the surge in costs, labor and maintenance costs also rose, noted Andrew Light, analyst at Citigroup.
Revenue grew 6% to 5.7 billion euros, as resilient fares on passenger flights, 3% growth in passenger traffic and recovery in its cargo business offset currency hits and less-full planes.
Continued
Europe's second-largest airline said it lost 542 million euros, or 1.84 euros a share, for the three months ended March 31, after earning 44 million euros in the year-earlier fourth quarter. Its annual profit of 748 million euros was well below the 1.19 billion euros compiled in a survey of analyst estimates by FactSet Research.
Most of the quarterly loss was on a 493 million euro after-tax provision due to a European and U.S. investigation into the air-cargo industry. Though other airlines including British Airways also have taken provisions over the European Union and U.S. probe, Air France's was higher than what was expected.
But even excluding the cargo provision, the airline ran a loss during the period.
Operating costs rose 7% during the latest quarter, Air France-KLM said. While fuel represented much of the surge in costs, labor and maintenance costs also rose, noted Andrew Light, analyst at Citigroup.
Revenue grew 6% to 5.7 billion euros, as resilient fares on passenger flights, 3% growth in passenger traffic and recovery in its cargo business offset currency hits and less-full planes.
Continued
