Air France KLM Issues Profit WarningStephanie Stanton (Author) Published Date : Jul 08, 2014 12:21 ET
The share price of Air France-KLM knock down to 5% after the company revised their profit forecast down for their poor cargo and tough competitions from the rivals recently as the airline group given the profit warning on Tuesday.
According to the company they are expecting more competitions from the other companies and also their long-hault price and the less demand of their cargo along with some other issues.
Earlier the profit forecast of Air France KLM was 2.5bn while the revised profit forecast was cut down to 2.2 and 2.3bn euros just after their rivals Lufthansa announced their profit warning recently.
According to the company statement it said, While not representing a turning point in market trends, the June traffic figures published today as well as bookings for July and August nevertheless reflect the over-capacity on certain long-haul routes, notably North America and Asia, with the attendant impact on yields.
While the airlines group also added that the currency problem in Venezuela also one of the big reasons for their profit warning as the ticket sales on the country has been not up to the mark.
This comes on top of the persistently weak cargo demand and the challenging situation in Venezuela identified in the first quarter.
However the Air France-KLM is confident of gaining a 20% rise on their earnings comparing to last year.
Air France KLM Issues Profit Warning