Air France-KLM, the largest airline operator in Europe, has issued a profit warning and has announced plans to cut its capacity until next summer. It has blamed the tough economic climate for its failure to meet targets.
The airline remains optimistic that its operating profits will remain “comfortably reassuring” if the market conditions do not deteriorate any further.
It has reported an operating profit of £185m for the quarter to June 30. The airline plans to add £79m in cost savings to its existing £150m plan and has cut investment.
Air France-KLM becomes the first major European airline to issue a profit warning since financial crisis hit the industry last month.
Airlines across Europe suffered from record-high fuel prices for most part of the year and are now affected by the global economic downturn and reducing customer numbers.