Air France puts cost of strike, lost demand at 500 million euros
By Matthias Blamont and Andrew Callus
PARIS (Reuters) - Air France-KLM (AIRF.PA: Quote) has put the total cost of last month's two-week pilots strike at up to 500 million euros ($632 million), enough to wipe more than a fifth off its estimated full-year core profit and sending its shares to a 13-month low.
Europe's second-biggest network carrier by revenue had already in July revised down its target for 2014 earnings before interest, tax, depreciation and amortization (EBITDA) from 2.5 billion euros to between 2.2 and 2.3 billion.
At the time, it mainly cited overcapacity on long-haul routes and weak cargo demand. The strike, combined with a warning note on forward demand, have added to its woes.
The Franco-Dutch group said on Wednesday total passenger traffic fell 15.9 percent in September compared with the year before, adding that bookings for the fourth quarter were down by between 1 and 2 percentage points.
The 500 million euro strike cost estimate included a direct impact of between 320 million euros and 350 million, reflecting lower receipts and the purchase of tickets for customers on rival airlines, with costs partly offset by savings on fuel and other costs. The remainder was down to the delay in bookings.
Chief Financial Officer Pierre-Francois Riolacci told reporters the airline had sold some 28 percent of capacity for the fourth quarter, compared with 30 percent normally at this stage of the year.
"The group estimates that part of this delay could be progressively reduced over the coming weeks," the carrier said in a statement, adding it was difficult to exactly quantify the adjustment given the exceptional nature of the event.
Shares in the Franco-Dutch airline group, which had lost 22 percent since the strike began in mid-September, fell more than 5 percent to touch a low of 6.26 euros, their lowest since September last year. They closed down 2.5 percent. Continued...